Dear Reader:
March 7, 2016
Thank you for putting up with this, some draft chapters from a book manuscript---to be published, Deo volente, by the University of Chicago Press, perhaps in 2009.
Any form of comment you find convenient has my
thanks. It would be useful for example if you gave me
your copy of the manuscript with your comments directly on it, in printed copy or in electronic form, whether
explicit remarks or mere indignant exclamation marks
and irritated circlings of errors. I’ll send it back, once
I’ve stolen your good ideas, so that you may treasure it
forever.
The plan---in your own work you know the usual fate
of such plans!---is to proffer an improved MS to the Press
in the spring of ‘08. What you have here is the version of
early October, 2007, as complete as I could make it by
then, submitted to give you plenty of time to look at it.
I’ve tried to make the draft cohere so that you can see the
argument and judge at least some of the evidence, but it’s
early days yet, and Final Coherence, you know, is often
achieved late. . . if at all. You will note that the coherence diminishes towards the end of the book: I have not
quite gotten my thinking clear there. I have included The
Voice of the Author from time to time, identified by this
same type face, to keep straight the big and little jobs I
need to do, and when in bold to offer promissory notes of
various kinds, and to ask you questions directly.
I will continue after this submission working on the
manuscript, discovering the many absurdities in it and
trying to pay off a few of the numerous promissory notes.
I suppose the basic argument of the book won’t change--you be the judge. I am open to persuasion. Really I am.
1
Perhaps it is lunacy to argue that a rhetorical change
was at the root of the industrial revolution, and of liberalism, and of all our joy, in which case you need to tell
me, and just why. I know for sure that you will have
many suggestions of books and articles I simply must
read before I venture such a strange---yet hoary--argument.
But I do live in hope of an Easter resurrection, so I
can move to Volumes 3 and 4 and complete the task for
which I now believe my Anglican God put me on earth!
Laus Deo.
Deirdre McCloskey
720 S. Dearborn, Unit 206, Chicago, IL 60605
312-435-1479
deirdre2@uic.edu
deirdremccloskey.org
Bourgeois Towns:
How Capitalism
Became Virtuous, 1300-1776
2
[The Bourgeois Virtues, Vol. 2]
Deirdre McCloskey
University of Illinois at Chicago
deirdre2@uic.edu
deirdremccloskey.org
3
Table of Contents
The Argument: How a Change in Talk Made the Modern World
Acknowledgements
Part 1
The Shifting Rhetoric of the Aristocratic
and then Bourgeois English
Needs to Be Explained
Chapter 1: Bourgeois Precursors Were Ancient
Chapter 2 But the Early Bourgeoisies Were Precarious
Chapter 3: The Dutch Bourgeoisie Preached Virtue
Chapter 4: And the Dutch Bourgeoisie Was Virtuous
Chapter 5: Yet Old England Disdained the Market and the Bourgeoisie
Chapter 6: And So the Bourgeoisie Could Not “Rise”
Chapter 7: But in the Late 17th Century the British Changed
Chapter 8: For Example, a Bourgeois England Measured
Chapter 9: The New Values Were Triumphant by 1848, or 1776, or even 1710
13
22
35
43
52
60
71
82
92
Part 2
The Bourgeois Virtues
Were Philosophized in the 18th Century
Chapter 10: Adam Smith Shows Bourgeois Theory at Its Amiable Best
Chapter 11: Ben Franklin Was Bourgeois, But not Prudence-Only
Chapter 12: Bourgeois Theorizing Was in Fashion
Chapter 13: Smith Was the Last of the Former Virtue Ethicist
Chapter 14: Smith was No Reductionist, Economistic or Otherwise
Chapter 15: “Hobbesian” Prudence is not Sufficient
Chapter 16: Prudence-Only is Refuted by Experience and Experiment
Chapter 17: The Left Should Acknowledge the Virtues
Chapter 18: But So Should the Right
102
113
120
130
138
146
154
162
172
Part 3: Material Explanations
for the Subsequent Enrichment
Do not Work
Chapter 19: Modern Growth is a Factor of at Least Fifteen
Chapter 20: It Was not Thrift
Chapter 21: Nor Was It Original Accumulation, or the Protestant Ethic
183
191
199
4
Chapter 22: Foreign Trade Was Not It , Nor the Slave Trade, Nor Imperialism
Chapter 23: “Material” Causes are thus Rebutted
Chapter 24: Nor Was It Nationalism
Chapter 25: Nor Institutions: Against North and Braudel
207
216
224
230
Part 4: Bourgeois Rhetoric Does the Work
Chapter 26: It Was Unexpected Technology, So We Need New Economic Models
Chapter 27: Ideology is Rhetoric
Chapter 28: Sweet Talk is How We Work
Chapter 29: Sweet Talk is Virtuous
Chapter 30: The Bourgeoisie Enacts Speech
Chapter 31: Bourgeois Virtue is an Idealism of Ordinary Life
Chapter 32: How One Might See the Coming of a Bourgeois Rhetoric as Good
240
251
260
274
289
299
301
some notes that even this rough draft has not fitted in
312
Works cited
320
5
The Argument:
How a Change in Talk Made the Modern World
Once upon a time a change happened unique to Europe, especially after
1600 in the lands around the North Sea, and most especially in Holland and then
in England and Scotland---though the change was foreshadowed in northern Italy and the Hansa towns, and tried out in 2nd century B.C. Carthage and 18th
century A.D. Osaka. The change was the coming of a business-dominated civilization.
A hard coming we had of it. But the hardness was ideological and rhetorical, not material. What made the modern world, as many economic historians
are realizing, was not trade or empire or the exploitation of the periphery. These
were exactly peripheral. Anyway imperialism was routine, in the Athenian Empire or the Abbasid Empire or the Moghul Empire. Nor was the modern-making
a class struggle. Again recent historians have come to see the class struggle as
exactly not the history of all hitherto existing societies. Nor did a businessdominated civilization come from any of the splendid engines of conventional
economics, limited in horsepower, such as the division of labor or increasing returns or the downward march of transaction costs or the Malthusian pressures
on behavior and the chances of selection.
What made the modern world was, proximally, innovation in machines
and organizations, such as the spinning jenny and the insurance company, and
innovation in politics and society, such as the American constitution and the British middle class. And such innovations of the 18th and 19th centuries in Europe
and its offshoots ultimately came out of a change in what the blessed Adam
Smith called "moral sentiments." That is, it came out of a change, ultimately, in
the rhetoric of the economy. Honest invention and hopeful revolution came to be
spoken of as honorable, as they had not been before, and the seven principal virtues of pagan and Christian Europe were recycled as bourgeois. The wave of
gadgets, material and political, in short, came out of an ethical and rhetorical
tsunami c. 1700 in the North Sea.
That’s the argument.
To say it in a little more detail:
In Dante’s time a market was said to be an occasion for sin. Holiness in
1321 was earned by prayers and charitable works, not by buying low and selling
high. And still in Shakespeare's time a claim of "virtue" for working in a market
was spoken of as flatly ridiculous. Virtue was earned by nobility, not by bargaining. The very name of “gentleman” in 1600 meant someone who attended the
Cadiz Raid or attended Hampden Court, engaging in nothing so demeaning as
actual work.
6
But from 1321 to 1600 in northern Italy and in Holland, and then more
broadly down to 1776 and still more broadly to 1848, something changed in the
talk of Europe. In England the change in the rhetoric of the economy happened
during a concentrated and startling period 1600 to 1776. The change? Capitalism and bourgeois work came to be spoken of as virtuous. In some ways, though
not all, they became in fact virtuous. And by the end, by 1848, notoriously, in
Holland and England and America and other offshoots and imitators of the
northwestern Europeans a businessperson was routinely said to be good, and
good for us. Capitalism, from the precursors in the Italian states around 1300 to
the first modern bourgeois society in Holland around 1600 to a world-making
rhetoric around 1848, grew for the first time in history on a big scale to be acceptable. The rise of a business-dominated civilization, which came before the
material changes resulting from it, was historically unique. It was a change in
ethics, that is, a change in earnest talk about how to be good.
The book moves from the seen-to-be, the "rhetoric" of capitalism, as I put
it, to the actual. Most controversially, to speak of material actualities, it claims
that the rhetorical and ethical change caused modern economic growth, which at
length freed us from poverty. People came to accept the creative destruction of
the old ways of doing things, and the economy paid them back with interest.
The change was the cause, too, of a liberalism which at length abolished slavery
and freed women. People came to expect to have a say in their governments as
in their markets, and the polity, too, paid them back with interest.
The industrial revolution and the modern world, I am claiming, arose
from a change in the way people talked about business—not from an original accumulation of capital or from an exploitation of the periphery or from imperialistic exploitation or from a rise in the savings rate or from improvement of property rights or from the birth-rate of the capitalistically gifted or from a manufacturing capitalism taking over from commercial capitalism or from any other of the
materialist machinery beloved of economists and calculators left and right. The
calculations don’t work. Rhetoric does.
And neither did the modern world arise from the sort of psycho-social
changes that people often think Max Weber posited in 1905. It was not a
Protestant ethic or a change in acquisitive desires or a rise of national feeling or a
“industrious revolution” or any other change in how people behaved as individuals that initiated the new life of capitalism. These were not trivial, and are surely some flourishing branches of a business-dominated civilization. But they were
not the root. People have always been hard working and acquisitive and proud,
when circumstances warranted it. Thrift begins with the expulsion from the
Garden of Eden. Greed was a sin and prudent self-interest a virtue from the beginning. And as for nationalism, Italian cities in the 13th century, or for that matter Italian parishes anywhere, evinced a nationalism---the Italians still call the local version campanilismo, from campanile, the church bell tower from the which
7
the neighborhood took its time---that would do the average Frenchman of 1914
proud.
After all, many of the differences in “culture” to which we attribute so
much can disappear in a generation or two. The grandchildren of Hmong immigrants to the United States differ in many of their values only a little from the
grandchildren of British immigrants. If you’re not persuaded, add a “great” to
“grandchildren,” or another “great.” What persists, by repetition at a mother’s
knee or through stories told in literature high and low, are ethical valuations.
Consider the high valuation of prudence and hope and courage in American civilization, and a persistent faith in an identity of unrootedness, what the Dutch
economist Arjo Klamer has called the American “caravan” society as against the
“citadel” society of Europe, the American frontier myth or the Hollywood road
movie, the American folk religion that “you can be anything you want to be.” It
wipes out in a couple of generations a Northern-European ethic of temperance
and justice or an East Asian ethic of prudence and love.1
Many people, for example, said in the 1950s and 1960s that India would
never develop economically, that Hindu culture was otherworldly and would
always be hostile to capitalism. For thirty years after Independence such a rhetoric of a Gandhian-cum-London-School-of-Economics socialism held the “Hindu
rate of growth” to 3.2 percent per year, a sad 1 percent a year per capita as the
population grew. But at last it faded. A capitalist rhetoric arose in India, supporting the partial overthrow of the “License Raj.” And so the place commenced,
after Ravi Gandhi (no relation) in 1980 and especially after Manmohan Singh in
1991, to increase the production of goods and services to rates shockingly higher,
now at fully 9 percent per year. Birth rates are falling, as they do when people
get better off. At 9 percent the worst of Indian poverty will disappear in a generation or two, because income per head will have increased then by a factor of as
much as 8. Eight. Even at the more moderate rates of 7.3 percent per year assumed in 2007 by Oxford Economics it will have tripled.2 Tripled. The wider
culture didn’t change 1980-2009, and won’t. People still give offerings to Lakshmi and the son of Gauri as they did in 1947 and 1991. They still play cricket. In
the year 2034, one supposes, the Indians will persist in these bizarre cultural
practices. Yet they will have entered the modern world, and the modern word, of
a business-dominated civilization. They will be the better for it.
What changed in Europe, and then the world, I am claiming, was the
rhetoric of capitalism, that is, the way influential people talked about earning a
living. The talk mattered because it affected how people valued economic activity and how governments behaved towards it. Max Weber in fact had just such a
change in mind, and his instinct to take religious doctrine seriously in accounting
for the change deserves respect. The change in talk about economic life provided
1
2
Cite Arjo
Insert cite to Oxford Economics report on India
8
warrants for certain changes in behavior. But the talk was essential. The trade to
the East and the New World was not essential, though it got the most press. It
was small relative to trade among the Europeans themselves. The character of
the European bourgeoisie did not change. Protestantism and nationalism
changed, but were side shows. What did change was the attitude towards the
bourgeois life and the capitalist economy, by the bourgeoisie themselves and by
their traditional enemies. That was no side show, and did change, a lot.
Without a new acceptance of markets and businesspeople and the bourgeoisie the society of Europe would have continued to bump along in a zero-sum
mode, as had every society with fleeting exceptions since the cavemen. Aristocrats and priests would have continued to live off highhanded extractions from
peasants, and no one would have thought to turn a profit by inventing a seed
drill for the field or an atmospheric engine for the mine. Why bother, if the Sultan would throw you off a cliff for your trouble, or if the Emperor’s noblemen
would swoop down to seize your profits? Without a business-dominated civilization the profit from invention would have continued to be seen as ignoble.
Buying low and selling high would have been continued to be seen as unethical.
Institutionalized theft would have continued to be seen as aristocratic. Alms and
tithes would have continued to be seen as holy.
Not that aristocrats, or for that matter priests, hesitated to engage in trade
when profit was in the offing. The Cistercian monks were for centuries the cleverest merchant farmers in Europe. It is not desire for gain that changed. The
Middle Ages are not to be viewed as a contentedly poor Merrie Englande starring Errol Flynn. This much we know from a century of revision of the Romantic
German theory of medieval virtue. Capitalism is not about the rise of greed.
What did change were the articulated ideas about the economy, ideas about the
sources of wealth, ideas about a positive sum vs. a zero-sum economy, ideas
about progress and invention, above all ideas about what sort of calling was admirable. And so a new world was born.
A wise economist once said that “the ideas of economists and political
philosophers, both when they are right and when they are wrong, are more
powerful than is commonly understood. . . . I am sure the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.”3
So here.
*
*
*
*
The book is the second of four planned of a full-scale defense of capitalism, aimed at people like you who think it needs one. The project is an “apology” in the Greek sense of a defense at a trial, and in the theological sense of an
open-handed preachment to you-all, the beloved infidel or the misled orthodox.
My beloved infidel friends on the left and my also beloved but also misled ultraorthodox friends on the right have long joined in believing that capitalism is as
3
Keynes 1936, p. 383.
9
Marx put it in 1867, “solely the restless stirring for gain. This absolute desire for
enrichment, this passionate hunt for value.”4 Many on the left have been appalled, many on the right have been pleased.
But both of you, I am saying in the four volumes, are mistaken. On the
one side we should stop at once excusing Enron thieves, and stop accepting their
self-interested argument that unjust prudence, organized by Enron thieves, you
see, is all the ethics a businessperson requires. But on the other side we should
also stop at once encouraging Sierra Club radicals, and stop accepting their selfinterested argument that imprudent justice, organized by the Sierra Club, you
see, is all the ethics a society requires. Capitalism has an ethic beyond Greed is
Good. It has to have such an ethic to work. And its working makes people ethically better, not just better off.
The first volume, The Bourgeois Virtues: Ethics for an Age of Commerce (2006),
asked whether a bourgeois life can be ethical. A third volume, The Treason of the
Clerisy, soon to appear, co-authored with John McCloskey, will ask how after
1848 we European artists and intellectuals came to be so very scornful of the
bourgeoisie, and how the gradual encroachment of such ideas led to the disasters
of the 20th century. The fourth, still in draft, Defending the Defensible, will look into
the economic arguments against capitalism, such as its alleged dependence on a
reserve army of unemployed and its alleged destruction of the environment.
The four books lean against each other. If your worries about the ethical
foundations of capitalism are not sufficiently met here, they perhaps are more
fully met in The Bourgeois Virtues. If you feel that insufficient attention is paid
here to imperialism or the environment, more will be paid in Defending the Defensible. If you feel that the story here doesn’t explain why such a successful bourgeois life is now so despised in deeply progressive and conservative circles, put
in your early orders for The Treason of the Clerisy.
The four are one big argument. The argument is: Markets are not inconsistent with an ethical life, and indeed an ethical change in favor of markets characterizes Europe after 1300 in isolated parts of the European south (Venice, Florence, Barcelona) and after 1600 in larger parts of the north (Holland, England,
Scotland, America, Belgium, France), and then the world. But the artists and the
intellectuals—the clerisy---turned against liberal capitalism after 1789 and especially after 1848, leading in the 20th-century to the catastrophes of socialism and
nationalism and national socialism. The clerisy’s arguments in the century and a
half since 1848, voluble though they have been, have been on the whole mistaken, a return to pre-capitalist ethics. The bourgeois life has been on the whole a
material and a spiritual success. But if capitalism continues to be scorned as it
has been by many of our opinion makers, we can repeat if we wish the nationalist and socialist horrors of the century past. We can even add for good measure
4
Das Kapital 1867, German edition, Band 23, 1962, p. 168.
10
an anti-bourgeois religiosity, as new as 9/11 and as old as the Sermon on the
Mount.
The apology seems to take four volumes. A philosopher wrote recently, to
explain why he felt he had to cram his opus on "warranted Christian belief" into
three stout volumes rather than allowing himself four, "a trilogy is perhaps unduly self-indulgent, but a tetralogy is unforgivable."5 Yet bourgeois life and capitalism since 1848 have had a bad press, worse even than warranted Christian belief. The prosecution has written out the indictment of a business-dominated civilization in many thousands of volumes, from the hands of Rousseau, Dickens,
Marx, Lenin, Veblen, Sartre, Galbraith, Ehrenreich. Few attempts have been
made to defend a life in commerce, except on the economist’s grounds that after
all a great deal of money is made here. After such prolixity in the indictment of
capitalism, I suppose, my merely four volumes of defense, and themselves merely an adumbration of the many arguments that could be made in the case, seem
restrained.
Maybe it's time to begin a full scale defense that goes beyond prudenceonly. Maybe it’s time to offer the outlines of an ethical rhetoric for our globalized
souls, an idealism of ordinary life, recouping the virtues. If you are on the left,
and believe that on the contrary capitalism and the bourgeois life were born in
sin, and that they continue to impoverish and to corrupt the world, I hope to
plant at least some seeds of doubt. But likewise I hope to plant some seeds of
doubt if you are on the right, and believe that (admittedly) capitalism is “solely
the restless stirring for gain, this absolute desire for enrichment,” but efficacious
desire for enrichment, though (alas) it has corrupted our holiness and demeaned
our nobility.
I want to persuade both of you that your beliefs that capitalism is especially greedy, and the bourgeoisie sadly ignoble and unspiritual, might---just might--be mistaken. And I want to persuade you both that to go on bad-mouthing a life
of commerce is bad for our souls, and is death to our politics.
5
Plantinga 2000, p. xiv.
11
Acknowledgments
Still to be drafted. Here’s a strange one: the April 31st, 2004
meetings of the Illinois/Indiana Region of the Jane Austen Society of North
America, 24th annual gala at the Drake Hotel
New Zealand conference 1996
ANU conference 1996
12
Part 1
The Shifting Rhetoric of the Aristocratic
and then Bourgeois English Needs to Be
Explained
I want to have little summaries of every
Part and Chapter, to avoid the claim that
my argument is hard to follow. I therefore
also want to make every Part of Chapter title a declarative and summarizing sentence.
Few of the summaries in this version are adequate. I’ll rewrite all of them at the very
end of the project, when each chapter says
what it says.
Something happened to the standing of a bourgeois life in
England between 1600 and 1776. With whom? How to
prove? Where exactly? In what respects exactly? A sheer,
material, Marxist "rise of the bourgeoisie" does not seem to
explain it.
13
Chapter 1:
Bourgeois Precursors Were Ancient
Markets and exchange appear to have existed always, or at any rate from the invention of language. Long-distance trade is the most glamorous, Marco Polo, Kubla
Khan and all that. From the earliest times the obsidian for knife blades from the Valley
of Mexico and from central Turkey turns up hundreds of miles away from its source.
Lapis lazuli, a blue gemstone (it was for a long time the sole source of blue paint),
comes only from Afghanistan, yet litters archaeological sites far away in the Mideast
and South Asia. Amber from the shores of the Baltic Sea ends up in Egyptian grave
goods. People tend to imagine therefore that long distance trade matters the most. We
still believe it---witness the recent obsession with the U.S. trade balance with China.
But “penny capitalism,” as the anthropologist Sol Tax once called it, occurs in
every society, and matters more to the life of people.6 My big piece of cloth for ten of
your bone needles. Most American competition and cooperation---for trade involved
both---is with other Americans, even the ones down the street. Local markets and exchange, always, dominate the trade in exotic goods, quantitatively speaking. You
spend more dollars on plumbing repair and police work and school teaching and dry
cleaning earned by people in your own town than on hammers and answering machines from people in China. And therefore most of us nowadays are traders, many
even in hunter-gatherer societies, and certainly always in conditions of settled agriculture. You can defame this oldest profession, of being a kind of merchant, as “greedy” if
you want, though naming ordinary exchange that we all participate in after a terrible,
prideful, idolatrous sin seems prejudicial. You are being merely prudent to specialize
and trade. We do it. So did some of the cave men, after language.
The running of markets and exchange in towns, and therefore what I am calling
the bourgeois life, is of course not so ancient. But from the earliest strata at Jericho in
8000 B.C. the towns have traded, because---to speak of sheer human geography---no
town above a couple of thousand in population can live entirely on cultivating the land
without trading its services for food. With large numbers crammed into a town not
everyone could live by trudging out to the local grain field each morning. The fields get
too far away. In well-watered Europe in the Middle Ages the area of two football fields
in grain could support a person for a year, and perhaps could likewise in irrigated Mesopotamia. The average round trip per day would then be one mile for a town of 1000,
two miles for a town of 2000, and so on in proportion. It gets onerous fast, though to
this day many peasants worldwide in fact do it.
The economic logic of course runs the same way, and more powerfully. As Adam Smith said in 1776, “the division of labor is limited by the extent of the market.”
The bigger the place, the higher the proportion of people who find it prudent to specialize in pottery or weaving or keeping accounts. Even in an unspecialized hunter6
Cite Sol Tax
14
gatherer band the women specialize in hearth-linked activities, the men in venturing
forth, or smoking. The crippled man among the Ilongot who specializes in being a little
factory for scrapers and arrow points, or the gifted woman in being a shaman, get their
food from a trade in manufactures or services. Such a nascent middle class grows larger
as the town does. You may be 30% faster at throwing pots relative to your own plowing rate than other people, but the comparative advantage does you little good in a village of 100 souls, because after all there are too few people to buy your great output. In
a big town of 10,000, however, it will be worth your while to hang out a shingle and
specialize. And in a metropolis of 100,000 you will hire apprentice potters, make each
year 70,000 big pots with your own characteristic design, and become well and truly
bourgeois.
And so if the archaeologist’s spade uncovers a big town, it’s a sure thing that
many non-peasants lived in it. No surprise, of course: our image of towns from ancient
and not-so-ancient writings such as the Hebrew Bible or The Thousand and One Nights, or
from historical accounts of life in Athens, or, truth be told, from movies by Cecil B.
DeMille, are not populated by field-bound peasants.
Towns such as Ur, Kish, and Nippur dotting Mesopotamia south of modern
Baghdad began around 5000 B.C. as agricultural villages with peasants clustered to protect their stored grain and to honor their local gods. By 3000 B.C. the typical substantial
town would be two to four thousand, as Eresh was.7 In Eresh there would still be quite
a few peasants, if not only them. But a great city like Uruk, with a wall Gilgamesh himself claimed to have had built 9 km round, would have held 40,000 to 160,000 people,
most of them not walking to any field.8 Around 2000 B.C. the ur-city of Ur seems to
have had a population of about 200,000.9
And so to Changan (X’ian), China in 195 B.C. at 400,000 and Rome in 25 B.C. at
450,000, down to Beijing in 1500 A.D. at 672,000 and Istanbul in 1500 at 900,000. Such
city people were mainly neither peasants nor aristocrats. Almost all were traders in an
extended sense---not growing anything and not taxing anything. The bought low and
sold high, made finished goods from purchased raw materials, serviced the rest of economic activity in jobs as scribes, lawyers, surveyors, teamsters, manufacturing workers.
Take the proletarians and slaves out of the big-town total and what’s left is a bourgeoisie, the minority in the town who made their livings managing by sweet words the
markets for goods and labor and land.
*
*
*
*
Immediately, though, one runs into a gigantic scholarly controversy fueled by
politics. It’s that way with all writing about the bourgeoisie since Rousseau and especially since Marx. You can’t mention the word “bourgeoisie” without raising blood
pressures all around. This is a good place to deal with the controversy: immediately.
Postgate 1992, p. 80; the town’s name is uncertain.
Inferred using R. M. Adams’ densities from Postgate 1992, pp. 74, 80.
9 Kramer 1963, p. 89.
7
8
15
During the late 1930s Karl Polanyi, a refugee in London from the chaos of interwar Central Europe, researched what he believed was the history of markets, publishing the results in 1944 while financed by the Rockefeller Foundation at Bennington College in Vermont, as The Great Transformation. The book is still read eagerly, and has never gone out of print. Googling it in 2007 yielded fully 123,000 entries, to be compared
with smaller numbers for similar and similarly long-lived books from the time: 97,200
for Joseph Schumpeter’s Capitalism, Socialism, and Democracy (1942), 64,700 for Friedrich
Hayek’s The Road to Serfdom (1944), and 19,000 for Eric Williams’ Capitalism and Slavery
(1944)---though we academic scribblers need to be humbled by learning that Ayn
Rand’s, The Fountainhead (1943) gets 351,000 hits, and still sells 100,000 copies a year.
Polanyi was a lifelong socialist---his beloved wife Elena was one of the founders
of the Hungarian Communist Party---and believed that markets, the bourgeoisie, and
capitalism were mere vulgar novelties, mere interruptions in more civilized ways of
making our daily bread. He wrote for example that the labor market in England did not
exist until the 19th century. Until then English people, he claimed, did not work under
the discipline of supply and demand. Wages, he said, were conventional, decided in a
social contract of reciprocity, as it were. He said the same of land sales, and indeed he
did not think that so-called “markets” in grain and the like before recent times were anything other than administrative methods for provisioning the people. The bourgeoisie
was recent, the market was a parvenu, capitalism was an ethical catastrophe of recent
origin.
The Polanyi history of England is utterly, completely, even embarrassingly mistaken. Half of southern Englishmen were laborers as early as the 13th century, and land
in large and small plots was vigorously traded by all levels of society. We have the
documents, and have gotten more and more and more of them as the intellectual haze
surrounding the Middle Ages has lifted.10 Markets pervaded all of Europe from the
earliest times, as they pervaded much of the world. Kingdoms, wives, and immortal
salvation could be bought and sold. Contrary to what most educated people believe,
Europe and certainly England was from the earliest times thoroughly “monetized” and
nothing like a “subsistence” economy depending on barter. It would be difficult otherwise to explain the English danegelt of 991 and later, assessed in silver, or coin hoards
found at every chronological level from Gaulish time, or the ubiquity of money
measures in the earliest records, such as the Domesday Book of 1086. Such facts have
been known for a long time, and recently their meaning has become still clearer. As the
leading scholar of trade in the “Dark Ages” wrote in 2001, “economic historians are
moving increasingly to the view that the advanced regions of the Frankish economy [i.e.
of Charlemagne and his son Louis the Pious, ruling over all of France, most of Germany, the north of Italy 771-840] were more monetized than almost anyone dreamed three
decades ago.”11
10
11
For example, Postan DDD, Herlihy DDDD; Raftis DDDD; McCloskey 1976.
McCormick 2002, p. 681.
16
Really, most of what you think you know about how things worked in the Middle Ages---a hazy theory that Polanyi and you and I acquired from schoolbooks and
journalism reflecting the earliest generations of historical scholars, especially 19thcentury German scholars---has proven to be wrong. Peasants were in fact, it has been
discovered, profiteering and rational, as people are in Grimms’ fairy tales. They used
money, ditto. They were individualists, ditto. They could move house and job, ditto.
Unlike “peasants” viewed through the Romantic lens in modern times, they were not in
a sense “peasants” at all. One would have thought that the Romantic historians would
have listened to the Grimms.
In 1979 the historical anthropologist Alan Macfarlane summarized the longexploded theory as “a progression from small, isolated communities inhabited by
‘peasants’ . . . towards the market, monetized, ‘open’ structure of the eighteenth century,” and showed it for England to be entirely mistaken.12 Macfarlane has done ample
work himself on the primary documents exposing the mistakes, but in 1979 he was
building also on 70 years of revisionism in medieval economic and social history. One
could go on and on about the gross errors in Polanyi’s economic history.13 It’s as I say
embarrassingly bad stuff---though less embarrassing in Polanyi himself, who wrote in
understandable ignorance of the frontiers of medieval scholarship since 1900 and especially since 1945, than it is in his numerous followers nowadays. They have less excuse.14
In later work down to his death in 1964 Polanyi and his associates tried to
demonstrate that the ancient world followed his anti-market model, and in particular
that ancient Mesopotamia did. As socialists they wanted the market and the bourgeois
life to be a mere recent stage, now thankfully to be superseded by the re-establishment
of the communism that most intellectuals in the 1940s believed the remote past saw and
the future would hold. True, Polanyi conceded, local markets are ubiquitous. But such
“markets” are embedded in local culture, an outgrowth of his first master category of
anti-marketism, householding, the women’s realm. “Local markets are, essentially,
neighborhood markets,” where women flock to gather provisions for the nest (Polanyi,
Great Transformation, p. 62). Local markets, Polanyi said, are not a big part of commerce.
(He was again, as I said, mistaken in his history and his anthropology: penny capitalism
is big.) No real capitalist market could be expected to emerge from that, he said. (He
was mistaken again, though the belief persists that only big capitalists are real capitalists; thus Braudel DATE, pp.
. In truth a great merchant is a trader in the village
market writ large. That the one is male and the other female, we have since learned to
keep in mind, does not automatically make the one serious and the other trivial.)
Polanyi’s second and emphatically non-market category, reciprocal exchange, involves ritualized gift giving and receiving. The relations are highly personal: “the right
person at the right occasion should return the right kind of object” (Polanyi, The LiveliMacfarlane 1979, p. 54.
As for example do Hejeebu and McCloskey 1999; 2005.
14 cite guy criticizing us
12
13
17
hood of Man, p. 39). The model is politeness among friends. Like Malinowski’s Trobriand Islanders, a whole society in which reciprocity is prominent usually has low population and little division of labor. (Polanyi apparently did not realize that in the hands
of Marcel Mauss the realm of gift-giving had in the 1920s been brought under the species of markets.15)
Redistribution, on the other hand, occurs sometimes even in large economies.
“Redistribution obtains within a group to the extent that in the allocation of goods (including land and natural resources) they are collected in one hand and distributed by
virtue of custom, law, or ad hoc central decision.”16 The model is kingship and socialism, but the deeper model is the family, in which the mother redistributes food.
The point here is that Polanyi asserted that ancient Greece, China, and India, the
empire of the Incas, the New Kingdom of Egypt, the Dahomey Kingdom of West Africa,
and in particular Hammurabi’s Babylonia, were all organized on the principle of redistribution. He rejected the economistic vision of trade and markets. Polanyi wrote in
1944 that “broadly, the proposition holds that all economic systems known to us up to
the end of feudalism in Western Europe were organized either on the principles of reciprocity or redistribution, or householding, or some combination of the three.”17 He
claimed that so-called “market” prices are nothing of the sort, but merely “equivalences” determined by, say, the code of Hammurabi, not by supply and demand. And he
claimed that so-called “merchants” in such societies, in particular in the ancient Near
East, were in fact governmental or temple officials, not anything like the bourgeois merchants of modern capitalism.
This tale of ancient anti-economism, as I and many other students of the matter
say, also appears to be mistaken. The evidence is less embarrassingly overwhelming
than it is for the importance of markets in England before 1800. Still, we have a lot of
evidence, much of it collected after Polanyi’s ideas were innocently formed, and sometimes indeed in response to his eloquent advocacy. And sometimes it even works in
favor of a redistributive model. Michael McCormick has argued that shipments of
wheat in payment of taxes (the annona, the annual distribution to the populace of Rome
or, later, Constantinople, ending there in 618 A.D.) came to dominate trade in the western Mediterranean just as more commercial trade declined. “On the eve of its destruction, more and more of the eggs of [very] late Roman [i.e. eastern Empire, Constantinople] shipping had come to rest in the basket of the annona. So it was that, comparatively speaking, commercial shipping lessened to its lowest point in centuries in the second
half of the seventh century.”18 But this way of putting it emphasizes his greater theme:
that before and after the “destruction,” as late as the sixth century and as early as the
[Mauss DDDD
Polanyi, The Livelihood of Man 1977, p. 40.
17 Polanyi, The Great Transformation, pp. 54-55. Polanyi later grouped householding as a special case of redistribution and includes ‘market’ as a third
type of ‘economic integration’ Trade and Markets in Early Empires, 1957
and The Livelihood of Man, 1977.
18 McCormick 2001, pp.
15
16
18
late eighth century, the merchants were rushing around western Europe in search of
private profit.
Mostly the evidence works against redistribution or lack of real markets. We
now know for example a great deal about daily life in ancient Mesopotamians, because
the folk of that region wrote on cheap and permanent clay instead of stone or papyrus,
the one expensive, the other transient. In 1920, unhappily, early in the history of Assyriology, Anna Schneider wrote an influential book claiming that the economy of the
town of Lagash in southern Iraq was run on the basis of redistribution by the priests of
the local temple. Since Lagash was the only town then excavated, her book had an impact. The problem was that she relied on evidence collected from the very temple,
which as another Assyriologist, Daniel Snell, remarked recently, “quite reasonably
showed the concerns of the temple leaders and staff members.”19 “Traces of the temple
theory persist in textbooks,” Snell notes, and influenced Polanyi. But in 1969 Ignace
Gelb and in 1972 Klaas Veenhof eradicated even the traces.20 They showed that Mesopotamian merchants were mostly independent of state or temple, that is, that they were
bourgeois traders. In view of other evidence on the presence of hired workers, plainly,
from the earliest times, and commonplace after 2100 B.C., and transactions in land from
the earliest times, plainly, Polanyi’s notion that ancient Sumer or the central and northern Mesopotamian states were entirely non-market societies has not paid off. So it was
with every one of his searches for marketless societies. Late in his life he himself admitted so.21
*
*
*
*
And yet the failure of the Polanyi search for an earlier society entirely free of the
damned economists’ and capitalists’ markets does not imply that his more fundamental
point was wrong. His point was that markets are, as the modern sociologists express it,
“embedded,” which is merely to say that marketeers are people, too. It was a point that
Adam Smith devoted his life to making. Across cultures and for most of human history, Polanyi argued, material exchange had meaning far beyond than individual wantsatisfaction. That’s right. Think of your taste in furniture. Trade affirmed and
strengthened the social values of the larger community. Yes. Think of your gas grill for
neighborhood cookouts or your plasma TV for the Superbowl party. Trade occurs right
down to your last trade with a meaning and in a manner that a mere economist who has
never read Smith will not fully understand. To be sure.
In other words, Polanyi was in this---I say as an economist who was for decades
hostile to such views, and hadn’t read Smith seriously---on to something. I am still justified in my lofty disdain for the anti-market burden of his work, and especially the
work of his followers like the great classicist Moses Finley or the great political scientist
James C. Scott or the great economist Douglass North. Yet Polanyi’s extra “something”
Snell 1997, p. 149.
Gelb 1969; Veenhof 1972.
21 Cite from autobiography of NNNN
19
20
19
humbles even the proud economist. It is for example the main point of this present
book.
The economist Arjo Klamer has developed a context for markets rather similar to
Polanyi’s, but free of Polanyi’s passionate and evidence-skirting distaste for the market.22 The agora, the marketplace, as Klamer puts it, is prominent in all societies, but
flanked of course by the private oikos, the household, and the polis, the government.
Klamer points also to what he calls the Third Sphere---that is, a third public sphere additional to the agora and polis, a sphere for a cultural commons in which “people realize
social values like community, a sense of identity, solidarity, neighborhood, country, security, conviviality, friendship and so on.”23 Those barbeques, those Superbowl parties.
You could also call it, and Klamer does, the conversation of the culture. The Third
Sphere, in other words, depends as the others do on Klamer’s master concept, the “conversation”---the conversation about being an American male or a Dutch merchant or a
person who values modern art or an executive developing trust in a business relationship. Thus Akira Okazaki of Japan Airlines played cards endlessly with fisherman from
Prince Edward Island in Canada during the 1970s to develop a backhaul business in
bluefin-tuna-on-ice for the sushi market back home.24 Talk, talk, talk. Realize social
values. And do a little business on the side.
The anthropologist Alan Page Fiske has developed still another balanced version
of embeddedness, which can be partially matched to Polanyi’s and Klamer’s categories
and to the much older tradition in Europe of the seven virtues. In his Structures of Social
Life Fiske speaks of "market pricing" as one of his four "elementary forms." The other
three---communal sharing [you get meat because you belong to Our Crowd], authority
ranking [I am the chief, so I get more meat], equality matching [we're all in this together, so let's make the amounts of meat exactly the same for everyone]---do not involve
prices, that is, exchange rates between two different things, meat for milk, arrow points
for cave paintings. The society must somehow decide on the prices, “the ratios of exchange,” and Fiske accepts, contrary to Polanyi, that in any society with markets---and I
say most societies have them, and Fiske and Klamer agree---the “market decides, governed by supply and demand.”25 Fiske cleverly points out that the succession of four
communal-authority-equality-market correspond to stages of human maturity up to
about age 8, when kids finally accept exchange as against item-by-item equality.26 And
even more cleverly he points out that the succession also correspond in the theory of
scaling: categorical scales (in/out), ordinal (higher/lower), interval (same amounts),
and ratio (“Archimedean ordered fields”).
Here is how the various groupings lie down together:
Klamer 2006; Klamer and Zuidhof 1998; cf. Van Staveren DDDD.
Klamer 2006, p. 13.
24 Issenberg 2007.
25 Fiske 1991 [1993], pp. 47, 45.
26 Fiske 1991 [1993], pp. 48-49.
22
23
20
Fiske, Polanyi, Klamer, and the Virtues
Polanyi’s categories
Klamer’s spheres
Fiske’s forms:
Provisioning
oikos
Communal sharing
Redistribution
polis
Authority ranking
Reciprocity
not a perfect correspondence Equality ranking
with Klamer’s Third Sphere
Modern market
agora
Market pricing
The question
The seven principal virtues
“Who is ‘us’?”
“Who’s in charge?”
Love, Temperance
Courage, Faith
“Who or what counts
Justice, Faith
as equal?
Klamer: (humility); Hope
“What are the
ratios of exchange?”
Prudence
Source: Fiske, Structures (1991 [1993]), pp. 46-47; Polanyi 1944, DDDD; Klamer 2006;
McCloskey 2006, p. PPP.
But the categories of Klamer, Fiske, and what I am calling the seven principal virtues (they date in this form to Aquinas) firmly reject the Polanyan notion that the market is hostile to all human values, and is a merely modern pathology. They do so by
embedding bourgeois life in human life generally, as in fact Aquinas and the other urban monks of the 13th century were busy doing. All actual bourgeois people have nonmarket relations in their lives, and the market itself is embedded. Only stick-figure
parodies like Marx’s Mister Moneybags or Dickens’ Paul Dombey (until the very end of
the book, when he realizes his humanity) or Sinclair Lewis’ George Babbitt (ditto) do
not see the embedding, together with actual bourgeois misled by the rhetoric of Greed
is Good, and He Who Dies With the Most Toys is the Winner. Perhaps the better word
for the embedding is “entangling,” because the different spheres talk to each other and
parody each other in endlessly complicated ways. In The Purchase of Intimacy (date)
and earlier books the sociologist Viviana Zelizer has detailed the entanglement of market matters with the Third and other spheres.
Anyway the bourgeois man belongs to a religion or tribe or clan, and always to a
family and to the Third Sphere of his town. The non-market relations often radically
alter the deals he makes. The novelist of the modern bourgeoisie, Thomas Mann,
speaks of the protagonist of Buddenbrooks (1900) as entangling the sacred and the profane: “Sometimes, entirely by accident, perhaps on a walk with the family, he would go
into a mill for a chat with the miller, who would feel himself much honored by the visit;
and quite en passant, in the best of moods, he could conclude a good bargain.”27 The
community of believing Muslims, the umma, was for hundreds of years after the death
of the Prophet a minority in the various Arab conquests outside the Arabian peninsula
itself.28 You dealt specially with a fellow resident of the House of Islam---he paid less
taxes, he could not be a slave, he could not charge you interest.
27
28
p. 210.
Hourani 1991 2005, p. 96.
21
True, the market tends to be prudent, and therefore tends to be radically neutral
in whom it deals with. That feature of the market has recommended it to egalitarian
libertarians in a long line from David Hume and Adam Smith to Milton Friedman and
Robert Nozick. Prudence is indeed the central virtue of the agora, as courage is of the
polis and love of the oikos. But I repeat the market can be influenced by motives other
than prudence only. An elderly mother buys a house close to her children, but worries
whether it is prudent. Love and prudence are entangled. There are, I repeat again, other, non-market realms of a bourgeois or any human life. That is what Polanyi got right.
But markets play their entangled part, and in a great city the markets and the bourgeoisie running them have always played a great part. That is what Polanyi got wrong.
It is easy to confuse the commercial middle classes with the Bildungsbürgertum,
that is, the state bureaucrats and lawyers and professors. The confusion has political
dangers, as evinced in the catastrophe’s of a rent-seeking “middle class” in Africa. Education is the path to bourgeois life, especially after the Second World War. As I’ve said,
the bourgeois is becoming the universal class. Expand or drop
22
Chapter 2:
But the Early Bourgeoisies Were Precarious
The master words in our tale, “bourgeois” and “capitalist,” acquired their present meanings late, and largely from Marx. One could object in the style of some Polanyans that to apply the terms to medieval Europe, much less to second-millennium
B.C. Mesopotamia, is absurdly anachronistic. I think not, not so long as the two are
used colorlessly and scientifically and non-contextually.
The word “bourgeois” is merely a French version of the Germanic root of words
like “borough” and “Edinburgh,” that is, townsman. A “Burger” in German is, like all
similar words borrowed even into the Romance languages, such as borghese or bourgeois,
a free citizen of a chartered city. That is, he voted and mattered, as his wife and his apprentices did not. Charter by charter, slowly, the townsman in the Middle Ages became
independent of the system of lord and peasant in the surrounding countryside. By the
grace of the Emperor or a king the townsman would remain independent of it, and remain bourgeois, if he was not corrupted into pretending to rural lordship himself. He
had to resist the temptation of vanity to commission a noble genealogy from the heralds, as for example bourgeois Shakespeare did, or to take on wholesale the values of an
aristocracy, as the bourgeois-origin nobility of Florence and Venice most spectacularly
did.
So, let’s be colorless in the definition. The bourgeoisie is what’s left over when
you have subtracted from all the men the rent-earning aristocrats (with the gentry) and
the tithe-earning clerics (with the clerisy, that is, the intellectuals and bureaucrats) and
the lower-wage-earning peasants and proletarians. Notice that the other classes are defined here in a similarly colorless way, so that nothing is conveyed for example by the
word “peasant” except “hard manual worker in agriculture”---not the more colorful, if
often factually mistaken “member of a closed corporate community” or “carrier of Gemeinschaft from the glorious Germanic past.” B = Total Men – A – C – P – P’. The hard
manual/lower clerical/lower service workers, nickel and dimed, are the Ps, the peasants if in the country or proletarians if in the town. We can include or not include the
Clerisy depending on our purposes. It has mainly come from the Bourgeoisie itself, and
has always straddled.
Another gigantic scholarly controversy looms. You can see that I don’t want to
use “bourgeois” to mean “stupid, greedy, uncultivated,” as it has been commonly used
by some scholars and a lot of journalists since 1848. That is, I do not want to prejudge
the main question at issue, which is whether the bourgeoisie and its markets and capitalism were good or bad for us. If one insists on using the word “bourgeois” as, say,
Jean-Paul Sartre and Simone de Beauvoir used it, to mean the worst and most inauthentic types of town life in France c. 1950, then of course it is not going to be a great intellectual feat to conclude that bourgeois life leads straight to, well, the worst and most in-
23
authentic types of town life in France c. 1950. But I urge you to use the word not as a
term of contempt, but scientifically and colorlessly, to mean “owners and managers,
large in wealth or small, in the town.”
J. G. A Pocock provides the key to why Rousseau was so vehement against the
bourgeoisie and so insistent that it was not the body of citoyens. The word bourgeoisie
meant having special rights, rights for example to appear in a certain court in case of
disputes.29 They were rights that not everybody has, like the right the French aristocrats of Rousseau’s time had to be entirely free of taxes. A "freeman of the City of London" is not just some barrow boy.
The bourgeoisie can be haute or petite, large wealth or small, the international
merchant financing hundreds of bales of China tea offloaded onto the East India Dock
or the little shopkeeper in the High Street of Salisbury selling tea by the ounce. He can
be a Robert Owen managing a big cotton textile mill in Lanarkshire in Scotland or a clothier named Simon Eyre managing a few apprentices and journeymen in 15th-century
London. The word “bourgeoisie” is sometimes used for the haute alone, and you are
welcome if you wish to follow that usage. It’s a free country. God doesn’t supply human definitions. But the haute definition again tends to prejudge an open scientific issue, that is, whether capitalism is something entirely different from provisioning in local markets. Let’s leave the issue open until we have some evidence, and not close it
with our very rhetoric.
And I just used again, as I have freely so far, the magic word “capitalism.” I repeat: God won’t tell us how to use it. I propose, if God doesn’t mind, that we agree to
use the word to mean simply “modern markets.” There are good reasons for this likewise colorless usage. For one thing, there’s nothing automatic about growth in capitalism, though since 1776 or especially since 1848 many people have believed so. In particular there does not appear to be anything special about the use of “capital” in the
capitalist era. People used capital before capitalism. Profits were earned. Polanyi to
the contrary, markets flourished. No automatic machinery of accumulation got turned
on in 1760, no “take-off into self-sustained growth” happened as a result of higher saving rates, contrary to what Walt Rostow somewhat mysteriously claimed in 1960. Nor
does the capitalist machinery automatically exploit and alienate the proletariat. After
all, your ancestors and mine were proletarians, and yet here we are, their descendants,
well-to-do people still working for wages, big ones. Feeling alienated recently? Really?
For another, again, we don’t want to prejudge everything about the mechanisms
and morals of capitalism by defining it the way Marx did in Chapter 4 of Capital (according to the old standard, and inaccurate, English translation) as "the restless neverending process of profit-making alone. . . , this boundless greed after riches, this passionate chase after exchange-value."30 The original German actually says “solely the
restless stirring for gain. This absolute desire for enrichment, this passionate hunt for
value”: nur die rastlose Bewegung des Gewinnes. Dieser absolute Bereicherungstrieb, diese lei29
(Pocock 1981, pp. 356, 361, 364).
30 Cite: Mod Lib, pp. 170-171;
24
denschaftliche Jagd auf den Wert.31 The English words “never-ending” (endlos, ewig,
unaufhörlich) and “boundless” (grenzenlos, schrankenlos) are not in Marx’s German in the
passage; and the normal German word for “greed” (Gier) does not appear anywhere in
the chapter. Indeed, Gier and its compounds (Raubgier, rapacity; Habgier, avarice;
Goldgier) are rare in Marx. The fact attests to Marx’s attempt to shift away from conventional ethical terms in analyzing capitalism. Marx’s rationalist scientism, Allan Megill
notes, prevents him from saying “here I am making a moral-ethical point,” even in the
exceedingly numerous places that he was.32 The first 25 chapters of Das Kapital, through
page 802 of the German edition (page 670 in the Modern Library edition), contain
“greed” and its compounds in Marx’s own words only seven times (mainly in Chapter
8, “Constant Capital and Variable Capital”), with a few more in quotations.
Yet the sneer at the bourgeoisie’s endless/boundless greed is ancient, and Engels
after all approved the English translation. In any case, we do not want disdain for
commerce to be preordained by the rhetoric.
*
*
*
*
Such disdain for commerce is ancient and usual. The commercial Chinese have
long been burdened by a Confucian disdain for the class of merchants, ranked in the
hierarchy since 600 B.C. even below peasants. Recently the mainland Chinese seem to
have gotten beyond their disdain, as their cousins abroad have done for centuries. We
shall see. The Christians in their beginnings were the most anti-commercial people of
faith, more so than Jews or Muslims or Hindus. By late in the first millennium of Christianity the dominant Christians were monks and mystics and desert fathers, all of them
deniers of this world in the style of St. Augustine---and they were a great influence on
Muslim mysticism, too.33 The main point of the present book is that, startlingly, it was a
Christian Europe that after 1300 redeemed the bourgeois life.
Yet the disdain for people who are neither aristocratic nor clerical nor even
simply peasant, “honest” but poor, started early, and was prominent for a very long
time, even in Europe. It is still hard to ignore, because it is built into European literary
and religious traditions, providing the foundations for novels like Gain and movies like
Wall Street. The landed aristocrat disdained traders, though he engaged in trade when
he could. The peasant envied profit makers, though she took profit on her sales. The
proletariat grumbled about the boss, though stopped when he became one. Michael
McCormick notes that the “late Roman legacy of contempt for commerce” has occluded
the evidence for a revival of European trade in the 8th and especially the 9th centuries.
“Christian dislike of commerce---if not for its proceeds---allied with the new aristocratic
ethos of a warrior life to produce a ruling class” (and therefore evidence written by
them) “that was often indifferent and sometimes even hostile to the trading life. The
result contrast strikingly with the zest for both trading and warfare one finds in the paKarl Marx - Friedrich Engels - Werke, Band 23, S. 11-802, Dietz Verlag, Berlin/DDR 1962, p. 168, online at
http://www.mlwerke.de/me/me23/me23_161.htm#Kap_4_1.
32 Megill 2002, p. 262.
33 Hourani 1991 2005, pp. 72-73
31
25
gan, Germanic north and which still permeates the later saga literature” of the Christian
13th century.34
Which makes one contrast between the cultures of the Mediterranean and of the
German Ocean look strange.35 Germanic law codes of early times allow cash compensation for dishonor. (At least for free men. The national laws we have are about free men,
using the words “free” and “man” exactly, and therefore were about aristocrats and
other high-status men relative to a dishonor-able if majority class of slaves and women.)
An eye for eye is always possible and honorable in the German laws, but so is thus-andsuch quantity of silver for the eye. Tacitus says that minor crimes are punished by a fine in cattle or horses (in keeping with his claim that they knew not the use of money);
the major and capital crimes he instances are not mere assault (on that eye, for example)
but cowardice or treason: “even homicide can be atoned for by a fixed number of cattle
or sheep,” and therefore “feuds do no continue for ever unreconciled.”36 Notice that
Tacitus (probably himself of Gaulish origin) is startled by this. The prudent answer to a
crime, you see, is to demand wergelt, dissolving blood feuds in the solvent of cash. The
hero Gunnar in Njal’s Saga does so, as did every honorable Icelander in those days, at
any rate according to the sagas written three centuries later.
By contrast in the South from Homer to El Cid to The Godfather honor is absolute.
What is strange is that the implacable Southerners had long lived by a monetized and
commercial Mediterranean, heirs to a classical civilization based since the early first
millennium on seagoing trade. The savages of the Northern forests were making delicate calculations of monetary equivalences in a less commercial society. True, the honorable---that is, the aristocratic---part of the civilization of the classical Mediterranean
had always been suspicious of getting money. By contrast the Icelandic sagas (written
well after their events, I’ve noted, and admittedly therefore anachronistic) are about
men unashamedly at the margin between commerce and piracy. Arriving at a new
coast they had to decide whether to steal what they wanted or to trade for it. Great
hoards of Byzantine coins are found in Norse settlements on the North Sea, evidence
that the piratical and commercial ventures of the Vikings were not narrow in scope
[Sawyer]. But all this merely enlarges the paradox, that the apparently advanced part
of the Western world had from the beginning to the present a more primitive code of
honor---or at any rate a less bourgeois one.
The pagan Viking attitude towards merchants did not win out. Mediterranean
values did. In late 14th-century England, for example, Chaucer characterizes the three
most admired classes, “A KNIGHT there was, and that a worthy man. . . . A poor
PARSON of a town/ But rich he was of holy thought and work. . . . With him there was
a PLOUGHMAN who was his brother/ . . . Living in peace and perfect charity” (Chaucer
1387, beginning lines 43, 478, 529). He characterizes the twenty-seven other pilgrims in
The Canterbury Tales in notably less flattering terms. The four solidly middle-class fig34
35
36
McCormick 2001, p. 13.
I thank my colleague in Hispanic Studies at the University of California at
Riverside, James Parr, for conversations on this point.
21, p. 119, 12, p. 111.
26
ures of the Merchant, the Sergeant of the Law, the Reeve, and the Doctor of Physik are
described, unsurprisingly, as sharp profit-makers, “proclaiming always the increase of
his winning,” “or “so great a purchaser was nowhere known,” “full rich he had a-storèd
privily,” or “gold in physik is a cordiàl./ Therefore he lovèd gold in speciàl.” But a religious figure, the avaricious seller of papal pardons is also characterized as greedy “to
win silver as he full well could.” And throughout the Tales one class repeatedly accuses
another of greed and hypocrisy, supplemented by lust. That, after all, is the running
joke.
One must not get carried away with literary examples like this. As a leading
student of early Italian capitalism points out, Chaucer or Boccaccio or other imaginative “portrayals” of merchants are “organized by a complex system of stereotypes and
rhetorical images often resulting from ancient cultural models.”37 They are literary
works, with as the English professors say an “intertextual” relation to Horace or Virgil
complaining about the pursuit of riches (while sitting on riches), not somehow “objective” reports from the cultural frontier. And yet.
The economist and intellectual historian Jacob Viner asserted in 1939 that "the
Renaissance, especially in its Italian manifestations, brought new attitudes with respect
to the dignity of the merchant, his usefulness to society, and the general legitimacy of
the moderate pursuit of wealth through commerce, provided the merchant who thus
attained riches used it with taste, with liberality, and with concern for the welfare and
the magnificence of his city."38 The attitude in bourgeois towns has not in truth
changed much since the Renaissance of which Viner speaks. Outside of the corrupting
theories of the economists or the prejudices of the aristocratic rump, it is still judged
blameworthy in a merchant to pursue wealth immoderately, tastelessly, illiberally, and
without concern for the welfare and magnificence of the city.
But Viner was mistaken in not seeing the medieval precedents for an ethical
bourgeoisie. His history was off by a couple of hundred years. At the time he wrote,
the Renaissance (the very word is a modern coinage) was still seen as utterly novel, the
beginning of modernity. Since then historians such as Quentin Skinner and Jacques
Goff have looked back into the scholastic and medieval sources, finding even a natural
right of revolution in the writings of Dominicans and a justification for market work in
the writings of Franciscans.
In other words, the attitude of medieval Europe and its church towards the
bourgeoisie was nothing like entirely hostile, especially in northern Italy and in some of
the ports of the Mediterranean. Barcelona was from medieval times an exception to the
anti-bourgeois character of the rest of Spain, as in some ways it still is, and as in the 19th
century Basque Bilbao became. From the 12th century on, at least within the bourgeoisie
itself, and in the writings of certain high theorists of Christianity, trading and profit
were admitted as prudent goals. Thomas Aquinas and Duns Scotus, among others,
37
Todeschini 2008, p. 6. Correct all citations to the MS version here and below to correspond
with the published book.
38 Viner 1939, p. 43.
27
such as Sinibaldus de Fieschi (later Pope Innocent IV), who perhaps earned a law degree at Bologna, worked out in the high Middle Ages an ethical life for merchants.
We are inclined on the contrary to imagine with Hume and Voltaire that the
Middle Ages were dark in their elevation of “monkish virtues” over the trade that
Hume and Voltaire found so very civilizing. But in fact the radical monkishness of the
desert fathers from the third to fifth century, culminating in St. Augustine’s disdain for
the City of Man and echoing down the centuries to follow, was hardly possible in a Europe reviving commercially from the late 8th century on.
Nor was disdain for work in God’s world consistent, as Giacamo Todeschini has
recently observed in an important essay, with the task that popes and abbots faced, “the
pragmatic need to manage the system of Church properties.”39
The economic theorizing of the church was not merely a self-interested trick. The medieval doctors of the church invented a justification for trade---and this against their heritage from old Aristotle the professor of aristocrats or, as I say, from world-disdaining
Augustine---that emphasized the work involved in trade. If you think buying low and
selling high is not work, you need to read the anxious correspondence of Francesco Datini (b. 1335, d. 1410). What everyone knows about the medieval economy, that interest
was forbidden, was false in practice. Work made possible the charging of interest, even
if in veiled forms. Said the theologians: as God had worked to make the universe, so
the Italian merchants worked to earn their just rewards. Both rested on the seventh
day. Admiration of work is the central characteristic of a modern bourgeoisie, and here
it arises from Abrahamic theology, which after all from its beginnings in Abram’s property deal with the Lord has admired a hard-working engagement with God’s creation.
Todeschini argues that to understand the cultural identity of late medieval businessmen it won’t do to adopt “a forced and timeless separation of the lay and religious
rationalities or of the opposition between economics and moral codes.”40 I would only
add that to understand the cultural identity of modern businesspeople it won’t do to
adopt a forced and timeless separation of the lay and religious rationalities or of the opposition between economics and moral codes.
The medieval Italian manufacturers and merchants that Todeschini describes
were not merely Easter-duty Christians. They worked at their faith as they worked at
their trading. (But I repeat: they do also now, unless some professor or novelist has
persuaded them that economics is opposed to moral codes.) “The conceptual grammar
utilized in medieval economic treatises. . . were strictly connected with the theological
language of election, salvation, and spiritual profit.”41 In 13th and 14th century Italy the
“body” of merchants (il corpo de la compagni; condordia) is imagined as “the mystic Body
of the city as the double of Christ’s Body.”42
Really, it was. In a secular age we sophisticated and agnostic intellectuals can’t
quite believe such talk, and suppose with a smirk that we are witnessing hypocrisy.
Todeschini 2008, p. 2.
Todeschini 2008, p. 1.
41 Todeschini 2008, p. 2.
42 Todeschini 2008, p. 6.
39
40
28
“Aha, Senior Datini: caught again pretending to be motivated by love of God!” But
read the ample writings and confidential notebooks of Italian merchants of the time,
Todeschini argues, and you have to abandon the materialist hypothesis. The Fourth
Lateran Council of 1215 figures with his Italian businessmen as much or more than the
merely present bottom line. “The notion of ‘good reputation’ (fama) . . . is deeply related to the theological and juridical discourse about the importance of Christians to carefully protect the purity of their civic and religious ‘name’” (p. 8).
“It would be easy,” Todeschini writes, “to underestimate this attention . . . to the
reputation of the merchant and define it as the obvious result of an increasing market
society, duly concerned about the economic trustworthiness of its members: but it
would be an error, . . . a . . . very reductive point of view.”43 Licentiousness or commercial unreliability was a sin against the Body of Christ. The proverb on men’s lips was
“Gain at the cost of a bad reputation ought rather to be called a loss.”44 The merchants
of Siena and Prato and Milan “had the duty to be rich and at the same time honorable
men” (p. 15). It is rather like the merchants of New York and Tokyo and Mumbai today. Donato Ferrario founded a divinity school in 15th-century Milan, the way the
property billionaires the Pritzkers in Chicago have financed hospitals and concert halls,
and it would be “improper and anachronistic” to decode “this choice as [a] simple and
clever social expedient,” whether for Ferrario or Pritzker.45 The gospel of wealth of a
medieval merchant was based on the literal gospels, and on their interpretation by doctors of the church. The problem in modern life is the undermining of a gospel of
wealth, an undermining powered by a forced and timeless separation of the lay and religious rationalities.
And greed in northern Italy was constrained by secular virtues, too, dating back
to classical times and to aristocracy-admiring Aristotle. The manuals for Italian businessmen in the 15th century appropriated the qualities that civic humanism assigned to
the leaders of the polis.46 Benedetto Cotrugli advises the captain of a merchant ship to
be sober, vigorous, temperate, eloquent, and well-renowned (de extimatione predito). The
Northern Italian bourgeoisie of the 14th and 15th centuries exercised the virtue of profitseeking prudence, to be sure, but it balanced prudence with holy faith and love, and
pagan courage and justice, too.
Admittedly, Todeschini himself explicitly asserts that “the caution and vigilance
concerning moral, civic, . . . [and] economic behaviors” in 14th and 15th century. . . cannot be reduced to an early manifestation of [a] ‘bourgeois’ spirit.”47 But Todeschini appears to mean by “bourgeois” the modern notion after Rousseau and Marx and Sartre of
single-minded pursuit of the largest bottom line, the restless stirring for gain. the abso-
Todeschini 2008, p. 8.
Todeschini 2008, p. 9.
45 Todeschini 2008, p. 14. Note again that in his complaint that it is “anachronistic” he
seems to think the decoding is all right for nowadays.
46 Todeschini 2008, p. 16.
47 Todeschini 2008, p. 11.
43
44
29
lute desire for enrichment, the passionate hunt for value. He too is trapped in the modern prejudice against the very world “bourgeois.”
I would reply that early and late, nowadays as in the 14th century, the member of
la borghesia believes that “the social Corpus only . . . can sanctify his economic activities
and identify him as a trustworthy merchant” (Todeschini, p. 13). Businesspeople want
to be good, no less than politicians or priests do. They often fail, as fallen humans do.
But anyway, contrary to the modernizing notions that medieval people were very different from you and me, the medieval church allowed the merchants to do their good
work---but held them to a high standard, with the tortures of the Inferno awaiting those
who did fail.
At the other end of the five centuries, Aquinas to Adam Smith, of the momentous
turn from an anti-business to a pro-business civilization, the historian Matthew Kadane
has recently described the diary of a Leeds dyer of wool cloth, Joseph Ryder, kept from
1733 to 1768 in forty-odd volumes, amounting to 2,000,000 words (this book contains a
mere 170,000 adjust to final count). Dissenters were known for such spiritual exercises, a genre on which Robinson Crusoe drew. The job was, as Kadane puts it, “to watch
oneself for the smallest sign of deviation from the godly course.”48 Ryder watched himself with the intensity of a Woody-Allen character under psychoanalysis, and for the
same reason: his modern life in trade, he believed, might corrupt his soul. He wrote
(Ryder could have been a writer of hymns, it seems): “The dangers numerous are which
every saint surround/ Each worldly pleasure has its snare if riches do abound.”49 It is
an ancient theme, that one cannot serve God and mammon (“mammon” is Aramaic for
“wealth”). The sin of pride in possessions or in success leads away from God, as pride
in anything here below (said Augustine) does. As Ryder put in another of his hymn
lines: “If I’m concerned too much with things below/ It makes my progress heavenward but slow.”50 “By daily striving for worldly achievements undertaken to honor
God,” Kadane writes, “Ryder risked transforming his successes into excesses and his
achievements into vanity.” The last temptation is spiritual pride: I am proud that I am
not proud, and Satan swoops in at the last moment to claim my soul.
Kadane finds no evidence for the materialist claim that appropriate consumption
was merely a demonstration of creditworthiness, the outward and visible sign of inward and economic grace. His man Ryder does not resemble the credit-obsessed man
that Craig Muldrew, Alexandra Shepard, and Liz Bellamy find in England then and earlier, keeping up appearances to keep up his credit score.51 In Ryder’s diary any “social
implications of failure to meet credit obligations were subordinate to his worry about
God’s perception of him” (p. 12). Kadane concludes, “What is the first instance gave
shape to Ryder’s economic outlook, self-image, and the image he projected to others
was a spiritual struggle he wages daily in the privacy of his journal to stay poised between damning extremes,” that is, the extreme of denying the use of God’s gifts in the
48
49
50
51
Kadane 2008, p. 7. Adjust to book pages.
Kadane 2008, p. 7.
Kadane 2008, p. 10; well, not so gifted a hymn writer
Cite Muldrew at al.
30
world and the other extreme of worldly pride.52 Kadane argues that Adam Smith’s
amiable view of vanity tried to free exactly such people from their own worries. I’m all
right, you’re all right, capitalism’s all right. But only someone who like Smith was free
of serious engagement with his spiritual life could take such a relaxed and poppsychological view. Right down to the present many businesspeople have insisted that
God’s work comes first.
In modern times a strictly materialist hypothesis, the “hermeneutics of suspicion” à la Marx or Freud or Samuelson that dominates modern social science, strips
away any ethics except prudence only. “Aha, Mr. Moneybags: caught again operating
from a motive of prudence-only!” But the stripping originates from the rhetorical habits of our social sciences, not from the facts. By erroneously depicting businesspeople
only as creatures of the restless stirring for gain we paradoxically take away the ethical
limits on greed. Go for it; greed is good, because after all you are merely a disgusting
capitalist. The modern clerisy, left and right, scornful of the virtue of prudence, and attributing the corresponding sin of greed to anyone who watches his costs and considers
his benefits, has thus returned to the anti-economic ethic of the desert fathers.
*
*
*
*
So the bourgeoisie is always with us. Yet bourgeoisies have usually been precarious. Even during the momentous turn 1300-1776 in Europe there were debourgeoisfications. Venice came to be ruled by a quasi-aristocracy out of a total population of 100,000, the 500 men of the leading families who were permitted political careers. The historian William McNeill observes that "by 1600, if not before, the [Venetian] republic came to be governed by a small clique of rentiers, who drew their income
mainly from land, and to a lesser degree from office-holding itself. Active management
of industry and commerce passed into the hands of domiciled foreigners. . . . The kind
of commercial calculations that had governed Venetian state policy for centuries tended
to lose persuasiveness. . . . The men who ruled Venice were no longer active in business, but devoted a large part of their official attention to regulating business behavior."53 It certainly happened in Florence in the 16th century, though the Florentines continued to be manufactures with worldwide markets down to the present. It happened,
too, in the Netherlands in the 18th century. In the Dutch Republic before 1795, a tiny oligarchy—some 2000 men, perhaps a smaller group in proportion even than the 1 ¼ percent of the Venetian adult men —ran the country.54 Yet it left Amsterdam a leading
center for finance well into the 19th century, and Holland to this day a great entrêpot. It
is even claimed---though this time on no good evidence---that a loss of the bourgeois
spirit of entrepreneurship happened in Britain in (of all unlikely periods) the late 19th
century.55
Kadane 2008, p. 14.
MacNeill 1974, p. 147.
54 Parker 1985, p. 244.
55 Cite Landes by pages; Donald Coleman, “Gentlemen and Players.”
52
53
31
But that’s precisely what is strange about Europe. The decisive, irreversible turn to a
business-dominated civilization didn’t happen elsewhere. The making of the German
Ocean into a bourgeois lake c. 1453-1700, to be followed by the making of the North Atlantic into a larger one in the 18th century, and the world’s seas into the largest one of all
in the 19th century, constitutes only the most recent case of urban trade. But it was
strangely decisive. Aristocratic elites in Europe held power into the 20th century, and
the haute bourgeoisie keep remaking themselves into gentry or, if especially lucky, aristocracy---Baron Rothschild, of all things (as an anti-Semitic aristocrat would have put it
before 1885); or, still more bizarre, Sir James Paul McCartney (MBE 1965, KBE 1997), as
an anti-democratic elitist would have put it before 1965. Yet a bourgeois, businessdominated civilization keeps a-building, in some places not much retarded even by experiments in incentive-damaging socialisms and treasure-exhausting nationalisms.
Why Europe? It’s not racial, nor is it the traditions of the Germanic tribes in the Black
Forest, as the proud Europeans have been claiming for two centuries.56 That much is
obvious, if it was not already, from the recent explosive economic successes of India
and China, and before that of Korea and Japan. Yet it’s still an open question, a mystery, why China, for example, did not originate modern economic growth (which I
claim is one of the chief outcomes of a business-dominated civilization). It had enormous cities and millions of merchants when bourgeois Europeans were still hiding out
in clusters of a very few thousand behind their city walls. Chinese junks much larger
than anything the Europeans could build, armed with cannons invented centuries before the Europeans stole the idea, were making regular trips to the east coast of Africa
before the Portuguese managed to get there in their own pathetic caravels armed with
brass popguns. Perhaps the problem was precisely China’s unity, as against the mad
scramble of Europe at the time. For example, China was rhetorically unified, the way
any large, one-boss organization tends to be, such as a modern university. A “memorandum culture,” such as Confucian China (or the modern university) has no chance of
rational discussion: the monarch does not need to pay attention.57 “Rational discussion
is likely to flourish most,” Barrington Moore has noted, “where it is least needed: where
political [and religious] passions are minimal” (which would not describe the modern
university).58
Jack Goldstone has noted that:
China and India had great concentrations of capital in the hands of merchants; both had substantial accomplishments in science and technology;
both had extensive markets. Eighteenth century China and Japan had agricultural productivity and standards of living equal or greater than that
of contemporary European nations. . . . Government regulation and interference in the economy was modest in Asia, for the simple reason that
most economic activity took place in free markets run by merchants and
local communities, and was beyond the reach of the limited government
56
57
58
Landes remarks along these lines, perhaps in text.
Barrington Moore 1998, pp. 148, 151.
Moore 1998, p. 156.
32
bureaucracies of advanced organic societies to regulate in detail. Cultural
conservatism did keep economic activities in these societies on familiar
paths, but those paths allowed of considerable incremental innovation
and long-term economic growth.59
Kenneth Pomerantz argues for the accident in Europe, especially in Britain, of
cheap coal close to industrial sites. China's coal was far away from the Yangzi Valley, a
place in other ways comparable to Britain in wealth until the 19th century, where the
demanders of coal and in particular the skilled craftsmen were. China's coal was inland, with no cheap water routes like London's "sea coal" from Newcastle, heating the
city from the 16th century on [check exact dates]. China also lacked, Pomerantz argues,
easily colonized land to provide raw materials like cotton.60
One might object that a more vigorous proto-capitalism would have moved the
industry to, say, Manchuria, or at any rate to some other coal-bearing lands of the Central Kingdom, exporting the finished products instead of the raw coal. Eventually China did just this, as on a smaller scale the British did in the (newly) industrial northwest
and northeast, or the Germans in Silesia [check], or on a larger scale the Europeans did
in exporting finished products to the world. You do not have to move coal, even before
the railway made moving it cheap. You can move people and move finished goods.
And though it is true that European colonization was easy in the Americas because the conquistadors and the Pilgrims brought measles and smallpox in their baggage, it was not easy, at least on account of the disease gradient, in, say, India, or Indonesia—which were of course much closer to China than to Portugal, France, Britain, or
the United Netherlands. Spain conquered the Philippines, just south of Taiwan. And
this same more vigorous proto-capitalism would have found the land for the cotton,
too: indeed, as Pomerantz points out, in 1750 Ghangzhou [wrong: fix] province was
probably the largest source of cotton in the world. He argues that there was in China
no political alliance in favor of foreign trade. But this was in part a consequence of the
hostile attitude towards all merchants—the foreigners confined to the port of Ghangzhou (modern Canton) in the south and Kyakhta in the northern inland, on the border
with Russia, some 2500 miles away. It would be as though the inlets to European trade
were confined to Cadiz in the south St. Petersburg in the north.
As a factor in China's failure to converge on the Western standard in the 19th century Pomerantz explicitly rejects the low status in Confucian theory of merchants. But
wait. Until China began seriously to honor and protect entrepreneurs—namely, under
the neo-pseudo-Communists of the 1980s—China's growth was quite modest. Cite The
contrast with Japan presents an even more deep mystery. In the 18th century Japan
looked similar to England in literacy, city life, bourgeois intellectual traditions, lively
internal trade. Donald Keene notes that from the hand of Saikaku ( 1642-93) came “a
Treasury of Japan, a collection of stories on the theme of how to make (or lose) a fortune.
The heroes of these stories are men who permit themselves no extravagance, realizing
59
Jack Goldstone (draft of The Problem of the `Early Modern’ World
60
cite to counterfactual book
33
that the way to Wealth lies in meticulous care of the smallest details."61 Saikaku’s heroes are all merchants, every one. Daniel Defoe a little later couldn’t have done better.
True, Tokugawa Japan had isolated itself from foreigners, and was hostile to innovation—guns, for example, which were successfully controlled after enthusiastic
adoption before the Tokugawa used them with such effect. The retreat from the gun
kept sword-fighting display going into the 19th century, and providing later opportunities for samurai movies and militaristic propaganda. Yet under the Meiji restoration the
Japanese, a hundred years before the Chinese finally did, began to honor and protect
entrepreneurs, albeit with a heavy hand of government. As I have argued before, the
Japanese were starting to make the adjustment even to a pro-bourgeois social theory, at
any rate in merchant circles, as early as the late 17th century. Japanese growth commenced in the late 19th century to explode. A theory of convergence needs to explain
why the coal-poor and colony-poor Japanese—at any rate coal- and colony-poor until
they commenced conquering places like Manchuria on the grounds of just such a resources-theory of international relations as Pomerantz seems to be using—converged
smartly in the late 19th century. When after World War II they were compelled to abandon their militaristic and resource-based dreams of glory they attained in short order
European standards of living.
So elsewhere, mysteries. Early Islam was by no means hostile to innovation or
trade, and was certainly a site for great cities (Baghdad, Cairo, Cordoba were all greenfield creations), though it appears to have settled early on a mixed religious-commercial
law which made the taking of interest difficult (a difficulty shared of course with Europe) and which made the corporation inconceivable.62 One would like to know about
South Asian cities—again, like China, they were large and busy when Europe was somnolent. Perhaps caste mattered. In South Asia it usually does. In the ancient Mediterranean, I have noted, the economic rhetoric was notably hostile to commerce even
though the place was soaked in it. The ancient Near East, with ample commercial records, would be a place to start testing whether bourgeois values such as we now understand them had precedents even four or five millennia ago. But precedents do not a
successful bourgeois world make.
A study of world bourgeoisies would be a good idea, to understand why the ultimately successful one has a genealogy something like this:
61
62
Cite
cite recent JEH article.
34
The Genealogy of the Western European
and World Bourgeoisie
Roman commercial law to 476 C.E.
Byzantine and Muslim trade
Revival of European town life 800-1100
Viking commerce 500-900
Jewish, Lombard, Frisian commerce
Venice, Genoa, Barcelona c. 1300
Florence c. 1500
Hanseatic towns c. 1500
The Northern Lowlands 1585-1689
English, Scottish, American 18th century
Japanese parallels
The Rhineland, northern France, Belgium c. 1820
Political triumph of liberal and bourgeois values
in Europe
[theoretical reaction: 19th century]
[political reaction: 20th century]
Japan, Latin America, Asia late 20th century:
spread to world
35
Chapter 3:
The Dutch Bourgeoisie Preached
Virtue
What made such talk conceivable was the “rise” of
the bourgeoisie in northwestern Europe. The rise
was more than numbers: it was a rise in prestige.
The rise happened, in the Netherlands especially,
and the Netherlands was the model for the rest.
“Holland is a country where. . . profit [is] more in request than honor” was
how in 1673 Sir William Temple concluded Chapter Five of his Observations upon the
United Provinces of the Netherlands. The “honor” that Temple had in mind was that of a
proud aristocracy. Yet the profit more in request was not achieved at the cost of the
Dutch bourgeoisie’s soul.
The Dutch gave up aristocratic or peasant images of themselves a century before
the English and Scots or the American English colonists did, and two centuries before
the French. What made the project of ethics in commerce conceivable was the economic
and political rise of the middle class around the North Sea, merchant communities hurrying about their busy-ness with ships packed with herring, lumber, wheat, and later
with colonial products, the “rich trades” of spices and porcelain. The league of Hansa
towns from Bergen to Novgorod, and south to Deventer in the Netherlands, never took
national form. In the 8th century a “Frisian” was a synonym for “trader”---and for
“Dutchman,” since the languages now called Frisian and Dutch had not yet diverged,
and Frisia was not as it is now confined to the northern Netherlands.63 The Jews, the
“Italians,” and the Frisians were the great traders of the Carolingian Empire. The Dutch
were henceforth the tutors of the Northerners in trade and navigation. They taught the
English how to say skipper, cruise, schooner, lighter, yacht, yawl, sloop, tackle, hoy,
boom, jib, bow, bowsprit, luff, reef, belay, avast, hoist, gangway, pump, buoy, dock,
freight, smuggle, and keelhaul. In the last decade of the 16th century the busy Dutch invented a broad-bottomed ship ideal for commerce, the fluyt, or fly-boat, and the “German Ocean” became a new Mediterranean, a watery forum of the Germanic speakers—
of the English, Scots, Norse, Danish, Low German, Frisian, Flemish, and above all the
Dutch—who showed the world how to be bourgeois.
The shores of the German Ocean seemed in, say, 98 A.D. an unlikely place for
town life and the bourgeois virtues to flourish. Tacitus at least thought so. The storms
through which a skipper would cruise in his schooner were rougher than the Mediterranean of a navicularius, and were rough more of the year. Tacitus claimed that the
63
McCormick 2001, pp. 14, 671-72
36
Germani, and certainly the wild Batavii, used cattle rather than gold and silver as money, “whether as a sign of divine favor or of divine wrath, I cannot say”(he was criticizing civilized greed).64 “The peoples of Germany never live in cities and will not even
have their houses adjoin one another.”65 And he claimed it was precisely those whom
Dutch people later looked on as their ancestors, the Batavians, who were the first
among the Germani in martial virtue (virtute praecipui).66 The modern Dutch therefore
dote on Tacitus.
But it is doting, not a racial history, because the Dutch have been since the 15th
century at the latest the first large, Northern European, bourgeois nation. It was at first a
“nation” in a loose and ethnic sense, and nothing like as nationalistic as England or
even France. The modern master of Dutch history, Johan Huizinga---his name is in fact
Frisian---believed that Holland’s prosperity came not from the warlike spirit of the Batavians of old, or in early modern times from the Protestant ethic or the spirit of capitalism, or from modern nationalism, but from medieval liberties—an accidental free trade
consequent on the worthless character of its mud flats before its techniques of water
management were invented, and the resulting competition among free cities after the
breakup of Carolingian centralization.67 “We [Dutch] are essentially unheroic,”
Huizinga wrote. “Our character lacks the wildness and fierceness that we usually associate with Spain from Cervantes to Calderòn, with the France of the Three Musketeers
and the England of Cavaliers and Roundheads. . . . A state formed by prosperous burgers living in fairly large cities and by fairly satisfied farmers and peasants is not the soil
in which flourishes what goes by the name of heroism. . . . Whether we fly high or low,
we Dutchmen are all bourgeois—lawyer and poet, baron and laborer alike.”68
In the late 16th century the course of the Revolt against Spain stripped away the
aristocracy, which in parts of the northern Netherlands had been pretty thin on the
ground to begin with. Many aristocratic families simply died out. After the northern
Dutch had made good their defiance of the Spanish, by 1585---though it was not official
until 1648---they lacked a king, and so the aristocracy could not be refreshed. It is an
instance of the importance of marginality in theorizing the liberal evolutions of the 17th
and 18th century that North Holland was far from the courts of Burgundy or even of
Brussels that attempted to rule it, and very far indeed in miles and in spirit from its
nominal ruler from 1555 to 1648, Madrid. City-by-city it was quite able to govern itself.
It lay behind, or rather above, the Great Rivers, as the Dutch call them, protected the
same way the German army of occupation was protected in 1944 by a bridge too far.
What was left to rule was the haute bourgeoisie, the big merchants and bankers, very
haute in such a compacted, urbanized place at the mouth of two of Europe’s larger rivers. Yet such regenten, regents, for all their pride in humanistic learning and their hard
5, p. 105.
16, p. 114.
66 29, p. 125
67 Huizinga 1935, p. 25.
68 Huizinga 1935, pp. 110-112.
64
65
37
rule of the mere “residents” (inwoners) without political rights, were not aristocrats literally or in their own or in the public eye.
The mud flats became rich cities without, so to speak, anybody noticing, and by
the time Philip II and the Duke of Alva and others sprang to attention it was too late.
Mediterranean Europe, true, was still the place of great cities. In 1500 three out of the
(merely) four cities in Europe larger than present-day Cedar Rapids, Iowa (viz., 100,000
check) were Mediterranean ports, two of them Italian: Venice and Naples, with Constantinople. Of the twelve in 1600 half were still Italian (Palermo and Messina, for instance, had become giants of honorable city life).69 Yet it is indicative of stirrings in the
German Ocean that Antwerp in the mid 16th century temporarily and London by 1600
and Amsterdam by 1650 permanently broke into the over-100,000 ranks.
By the early 17th century the tiny United Provinces contained one-and-a-half million people, as against about six million in Britain and over eighteen million in France.
There may have been check?? more people in Paris and London, each, than in the
whole of the Dutch Republic. Yet more Dutch people (360,000 or so) lived in towns of
over 10,000 in 1700 than did English people then out of a much larger population. This
makes no sense at all: get the numbers straight! The United Provinces were
bourgeois, all right.
*
*
*
*
The question is whether Holland was the worse in spirit for being bourgeois. In
the town-hating, trade-disdaining rhetoric of some Christianity and all aristocracy and
nowadays the clerisy of artists and intellectuals, Holland would be corrupted utterly by
riches earned from gin, herring, government bonds, and spices, and would therefore be
“bourgeois” in the worst modern sense. Was such a town-ridden place less ethical than
its medieval self, or than contemporary and still aristocratic societies like England or
France?
Not in its declarations. I could rest the case for this by pointing to Simon Schama’s brilliant Embarrassment of Riches: NNN date, which discusses . . . . brief summary of Schama, not repeating what’s said in The Bourgeois Virtues
The Dutch art historian R. H. Fuchs notes that Golden Age painting was infused
with ethics. During the 16th century (the first age of printing) and later the Calvinist
and bourgeois Netherlanders eagerly bought “emblems”—paintings and especially
etchings illustrating ethical proverbs. Fuchs shows an example from 1624 of a mother
wiping her baby’s bottom: Dit lijf, wat ist, als stanck en mist? “This life, what is it, but
stench and shit?” Such stuff is especially prevalent early in the 17th century, it would
seem, when Dutch painting had not yet (as Svtelana Alpers has argued vigorously,
against such “iconological” readings) separated itself from written texts.
A painting such as Bosschaert’s Vase of Flowers (1620) looks to a modern eye
merely a bouquet that an Impressionist, say, might paint from life, though with much
69
Hohenberg and Less 1985, p. ; Devries, 1984, p.
.
38
more attention to surface detail than the Impressionists thought worthwhile. But under
instruction one notices (as the bourgeois buyer would have noticed without instruction,
since behind his canal house he cultivated his own garden) that the various flowers
bloom at different times of year. Therefore are collectively impossible (Fuchs date, p. 8).
Something else is going on. The iconologists among art historians favor a theological
interpretation: “For every thing there is a season, a time to be born and a time to die,
saith the Preacher.” “That in principle,” writes Fuchs, “is the meaning of every [Dutch]
still-life painted in the seventeenth or the first part of the eighteenth century.”70 I said
that Fuchs’ view (and the view of many other students of the matter, such as E. de
Jongh, whose work is seminal) has opponents who argue against it. Eric Sluijter, for example, joins Alpers in skepticism. He notes a 1637 poem by the Dutch politician and
popular poet Jacob Cats (1577-1660) which portrays painters as profit-making and practical. He analyzes in detail one of the few contemporary reflections on the matter, in
1642 by one Philips Angel lecturing to the painters of Leiden. The conclusion Sluijter
draws is that “it is difficult to find anything in texts on the art of painting from this period that would indicate that didacticism was an important aim.”71
The argument of the skeptics is that secret meanings, if no contemporary saw
them, might not in fact be there. Fair point. The purpose of paintings would not be, as
the iconological critics think, tot lering en vermaak, “to teach and delight,” reflected in
museum guidebooks nowadays—this from the humanism tracing to classical rhetoric
and Cicero, two of the offices of rhetoric being docere et delectare; and the other movere, to
move to political or ethical action.72 At least it would not be ethical teaching, delighting,
moving. Perhaps, as Alpers argues, it was essentially scientific, showing people how to
see.
But even Alpers and Sluijter would not deny that a still-life of a loaded table with
the conch, book, half-peeled lemon, half-used candle, vase lying on its side, and (in the
more explicit versions) a skull signifying all the works that are done under the sun, such
as Steenwijck’s painting of c. 1640, entitled simply Vanitas, was a known genre, to be
read like a proverb. Pieter Clauszoon’s [?]still life of 1625/30 in the Art Institute of Chicago is filled with symbols of Holland’s overseas trade—olives, linens, sugar, lemons—
to the same end. All is vanity and vexation of spirit, saith the preacher.
We ignoramuses in art history are liable to view “realism” as a simple matter of
whether the people in the picture appear to have “real” bodies (though rendered on a
flat canvas with paint: hmm), or instead have half-bodies of fishes or horses, or wings
attached for flying about (‘fantasy”); or whether you can make out actual objects apparently from this world (again admittedly on that flatness), or not (“abstraction”). Fuchs
observes on the contrary that what he calls “metaphorical realism” was the usual mode
of early Golden Age painting showing (barely) possible figures or scenery which nonetheless insist on referring to another realm, especially a proverbial realm, always with
Fuchs, p. 115.
Cite Alpers; Sluijter 1991, p. 184.
72 e.g. Cicero, Cicero, Orator 69 and de Oratore 2.115.
70
71
39
ethical purpose. The same is true of much of French and British realism of the early-tomid 19th century, such as Ford Maddox Brown’s “Work” [1852-63; in two versions] or in
France what Gustave Courbet called “real allegories,” which Richard Brettell notes put
aside the Academic conventions of mythology in favor of apparently contemporary
scenes but are nonetheless “ripe with pictorial, moral, religious, and political significance.”73 The Dutch pioneers of metaphorical realism, or “real” allegories, would depict merry scenes of disordered home life, such as Steen’s painting of c. 1663 “In Luxury
Beware” (itself a proverbial expression: In weelde siet toe), with ethical purpose. Such a
scene became proverbial in Dutch, a “Jan-Steen household” now meaning a household
out of control.74 “In Luxury Beware” is littered with realistic metaphors. Even an untrained eye can spot them: while the mother-in-charge sleeps, a monkey stops the clock,
a child smokes a pipe, a dog is feasting on a pie, a half-peeled lemon and a pot on its
side signal the vanitas of human life, a woman in the middle of the picture looking brazenly out at us holds her full wine glass at the crotch of a man being scolded by a Quaker and a nun, and a pig has stolen the spigot of a wine barrel (another literal proverb,
Fuchs explains, for letting a household get out of control).
The Golden Age of Holland, in other words, if thoroughly bourgeois, was ethically haunted. (Similar art is produced under similar social conditions, I just noted,
during the much later triumph of the bourgeoisie in England and especially in France.)
Even in Holland the age was still one of faith. After all, in the rest of Europe, and recently in the Netherlands itself, the varied Christians had carried out crusades against
one another. The transcendent therefore keeps bursting into Dutch art, as in Rembrandt. One thinks of parallels in 17th-century English poetry, especially from priests
like John Donne and George Herbert or Puritans like John Milton. The literary English
and the painterly Dutch reaching for God seems to come to a climax of earnestness
around the middle of the 17th century. Poetry and painting in the age of faith was not
just entertainment (delectare); it had work to do (docere et movere), justifying God’s ways
to man, to be sure, but also as Trevor-Roper observed Doing Politics (regere). A. T. van
Deursen instances Cats, who began as a poet of emblem engravings and who “wanted
to instruct his readers through moral lessons. . . . Those who desired something more
erotically tinted would have to learn Italian”—or buy a painting.75 Nothing means in
the early-17th century notion merely what it seems. Every thing in the poem or painting
points a moral.
An urbane reaction followed, in Dryden, for example, and in late Golden Age
Dutch painters. A century later the keys to this system of early-17th-century moralizing
symbols in both poetry and painting had been entirely mislaid. Romantic critics had no
idea what Milton was on about, since they had set aside the religious attitudes that animate his poetry. The two pillars that van Deursen spoke about, Christianity and pagan
literature, had been pushed apart by early Enlightened and then Romantic Samsons,
and the ethical building had collapsed. Even so spiritual a reader as Blake gets Milton
Brettell 1999, p. 14.
Kiers and Tissink, p. 173.
75 Deursen 1999, p. 173.
73
74
40
wrong. And in looking at painting even the Dutch critics of the late 18th century had
misplaced the emblematic keys to their own national art (admitting that Alpers and
Sluijter think there was no key to be lost in the first place). Foreigners had no chance at
all. Gerard Terborch had painted around 1654-55 a scene in a brothel in which a young
man bids with a coin for a woman (whose back is to the viewer) dressed in lovingly
rendered satin. The procuress goes about her business. And the table shows a vanitas
arrangement. The scene was conventional—Vermeer did one, for example; two if you
include Officer and Laughing Girl around 1657 in a different arrangement, similar to a
painting of 1625 by van Honthorst named explicitly The Procuress (in which a lute is offered: luit in Dutch, Fuchs explains, can mean either the musical instrument or a vagina). Yet by 1809 [Elective Affinity] Goethe was interpreting the Terborch painting as a
scene of a father [i.e. the john] admonishing his daughter [i.e. the whore] while the
mother [i.e. the procuress] averts her eyes modestly.76 Goethe is not to be blamed: an
18th-century engraver had retitled the work “Paternal Admonition,” and appears to have
deleted the coin from the client’s hand. On the other hand, Goethe likewise misunderstood Milton's Satan as a Romantic hero, and Hamlet as one, too, and so we have a
change in sensibility.
The painters themselves as much as the critics forgot, too. Fuchs shows the metaphoric realism of the Golden Age giving way in the mid-19th century to a pictorial realism, that is, a realism not of the soul---remember the flowers blooming and dying at different times of year---but of the eye. Or of the mechanized eye. The camera obscura, we
have only recently discovered, played a role in painting from the Renaissance on.
When photography comes, the artists follow suit. The subjects just happen to be in the
frame of the picture, as in Gustave Caillebotte’s masterpiece in the Art Institute of Chicago (1877). The bourgeois walkers at a rainy Paris intersection in the newly built quarters are glimpsed just at that moment, which will in an instant dissolve meaninglessly
into another moment. A different level of reality is not breaking in from above—though
one might argue that impressions such as this carried their own vanitas message. Ethical transcendent is rejected at last in the Industrial Age, as it was embraced in the early
Golden Age.
The first large bourgeois nation of the North was ethical, very far from blasé
about the good and bad of trade.
*
*
*
*
Nor was Holland especially corrupt in its political declarations. Rather the contrary. The Northern, literate Protestant nations on the North Sea were cradles of democracy, too, at least of a highly limited “democracy” among the full citizens of the
towns, and here too Holland led. The Dutch Republic was an insult to the monarchies
surrounding it, more so even than the older and inimitable islands of non-monarchy in
Switzerland, Venice, and Genoa. The Republic’s federal form (in which each province
76
Fuchs, p. 147.
41
had a veto in the generality and each city in the seven provinces) was an inspiration later to the Americans. Though I repeat it was nothing like a full-franchise democracy of
the modern type—the big property owners, as in the early American republic, were
firmly in charge—it was always a contrast in theory to the divine right of kings being
articulated just then by Philip and Charles and Louis.
Protestantism had something to do with all this good talk about the rights of
man (and the reality of the rights in Holland of women). The priesthood of all believers, and behind it the individualism of the Abrahamic religions generally, was central to
the growth of the bizarre notion that a plowman has in right as much to say on public
matters as a prince. Yet on the Catholic side, as again the school of Quentin Skinner has
taught us, the theory of natural rights justified a right even of revolution. Skinner argues that French, Dutch, and English theorists of politics in the early 17th century owed
a good deal to a scholastic tradition.
The English in their impetuous, aristocratic, pre-bourgeois way went a lot further
at the time than the Dutch did. At the Putney debates of the New Model Army in 1647
Colonel Rainsborough declared, “I do think that the poorest man in England is not at all
bound in a strict sense to that government that he has not had a voice to put himself
under.”77 He was a Puritan colonel [check DNB]. Such shocking, leveling views did
not prevail against the position more usual until the 19th century—that, as General Ireton replied to Rainsborough, “no person has a right to this [voice] that has not a permanent fixed interest [namely, land] in this kingdom.” But the position was taken, and became a specter haunting European politics for centuries. Charles I, two years after Putney, asserted the counter-position succinctly, before the headman's block: “A subject
and a sovereign are clean different things.” [CHECK SOURCE]
Whatever their debt to the scholastics, the Protestants, imagining early Church
history as their model, had challenged the monarchies and aristocracies of popes and
bishops. When priests were literally rulers, when cardinals marshaled armies and abbots and bishops collected a fifth of the rents in England, in Holland, and in other lands,
religion was politics. It was a small step in logic, if not in practice, to the citizenship of all
believers. Arthur Herman notes that the Presbyterian Kirk in Scotland was from the
time of John Knox “the single most democratic system of church government in Europe.”78 Herman may not be remembering that in the same 1560s and 1570s the Dutch
were creating the same sort of church government, by contrast to the less radical Lutherans and Anglicans elsewhere around the German Ocean: no bishops; pastors chosen
by the lay elders, that is, from the Greek, “presbyters.”
The northern Dutch like the northern Britons cast off their bishops in the 16th century but then took the further step of casting off their monarch too. "Religion, in fact,,"
observed Hugh Trevor-Roper in 1940, "was also an aspect of politics—the outward
symbol, the shibboleth, by which parties were known. . . Religion was not merely a set
of personal beliefs about the economy of Heaven, but the outward sign of a social and
77
78
Wootton, 1986, p. 286: GET AND CHECK and add to if necessary.
Herman, p. 19.
42
political theory."79 What seems to us absurd excess in Archbishop Laud or Oliver
Cromwell, he argues, is no more or less absurd than would be invading Poland in the
name of Lebensraum or defending South Vietnam in the name of anti-Communism or
invading Iraq in the name of suppressing world terrorism.
Bourgeois Holland, and its rhetoric of rights against kings and aristocrats, led.
They put on show what is supposed in anti-capitalist rhetoric to be impossible: the virtuous bourgeois.
79
Trevor-Roper 1940, pp 2, 4.
43
Chapter 4:
And the Dutch Bourgeoisie Was Virtuous
Yes, but surely the Dutch of the Golden Age did not actually carry out their
painted and poemed project of the virtues? Surely the bourgeoisie then as now were
mere hypocrites, the comically middle class figures in a Molière play; or, worse, of a
late-Dickens novel; or, still worse, of an e. e. cummings poem, n’est ce pas?
No, it appears not. In an essay noting the new prominence of “responsibility” in
a commercial America in the 18th and 19th centuries Thomas Haskell asserts that "my
assumption is not that the market elevates morality." But then he takes it back: "the
form of life fostered by the market may entail the heightened sense of agency."80 Just
so. Surely commerce, with 17th-century science, heightened the sense of agency. Earlier in the essay Haskell had attributed the "escalating" sense to. So the market does elevate morality. It did in market saturated Holland.
“Charity,” for example, “seems to be very national among them,” as Temple
wrote at the time (Temple DATE, iv, p. 88). The historian Charles Wilson claimed in
DATE that “it is doubtful if England or any other country [at least until the late 18th
century] could rival the scores of almshouses for old men and women, the orphanages,
hospitals and schools maintained by private endowments from the pockets of the Dutch
regents class” (Wilson, date, p. 55). The fact is indisputable. But its interpretation has
made recent historians uneasy.
Their problem is that like everyone else nowadays the historians are not comfortable with a rhetoric of virtues. An act of love or justice is every time to be reinterpreted as, somehow, prudence. Anne McCants, for example, begins her fine book on
Civic Charity in a Golden Age: Orphan Care in Early Modern Amsterdam (1997) with a discussion of how hard it is to believe in altruistic motives from such hard bourgeois and
bourgeoises. A compassionate motivation for transfers from the wealthy to the poor is
said to be “unlikely” and “can be neither modeled nor rationally explained.” By “rational” she seems to mean “single-mindedly self-interested, following prudence only.”
By “modeled” she seems to mean “put into a Max U framework that a conventional
Samuelsonian economist would be comfortable with.” Altruistic explanations are “not
to be lightly dismissed as implausible.” But then she lightly dismisses the compassionate grounds, with a scientific method misapprehended—altruism, she says, holds “little
predictive power.”
“After a long tradition of seeing European charity largely as a manifestation of
Christian values,” McCants is relieved to report, “scholars have begun to assert the importance of self-interest.”81 Her own interpretation of the Amsterdam Municipal Orphanage is that it was “charity for the middling,” a species of insurance against the risks
of capitalism. The bourgeois said to themselves: there but for the grace of God go our
80
81
Haskell 1999, p. 10.
All this: McCants 1997, pp. 2, 4, 5.
44
own orphaned bourgeois children; let us therefore create an institution against that
eventuality.82 As Hobbes put it in reducing all motives to self-interest, “Pity is imagination of fiction of future calamity to ourselves, proceeding from the sense of another
man’s calamity.” {search and cite: is it in an essay, “On Human Nature”?]
McCants makes as good a case as can be made for her Hobbesian view of human virtues. But the virtue of prudence does not have to crowd out temperance, justice, love,
courage, faith, and hope, not 100 percent.
The unease of modern historians in the presence of virtues shows in six of the
pages the leading historian of the Dutch Republic writing in English, the admirable Jonathan Israel, devotes in one of his massive and scholarly books, The Dutch Republic: Its
Rise and Fall (1995), to the Golden-Age poor law. It was he admits at the outset an
“elaborate system of civic poor relief and charitable institutions . . . exceptional in European terms.”83 The assignment of the poor to each confession, including the Jews (and
even eventually in the 18th century the Catholics), foreshadows the so-called “pillarization” (verzuiling) of Dutch politics, revived by Abraham Kuyper in the late 19th century:
sovereignty in ones own domain,.
“But,” Israel claims, “charity and compassion. . . were not the sole motives.”84
And then he lists all the prudential, self-interested reasons for taking care of the poor. His
first seems the least plausible—that “the work potential of orphans” was worth marshalling. Oakum picking could scarcely pay for even the first bowl of porridge, even in
Dickens. He turns to civic pride among towns and social prestige inside a town to be
got from running a “caring, responsible, and well-ordered” set of institutions. Certainly
the innumerable commissioned paintings of this or that charitable board argue that the
pride and prestige was worth getting. But it is hard to see how such rewards to vanity
can be distinguished from the virtue of charity itself, at any rate if we are to confine our
historical science in positivistic style to "predictive power." If caring is not highly valued by the society then doing it in well-ordered institutions will not earn social prestige.
“At bottom,” though, Israel continues—and now we approach the prudential
bottom line—the alleged acts of charity were “rather effective instruments of social control,”
to support the deserving poor (that is, our very own Dutch Reform in Rotterdam, say).
It amounted to paying off the poor to behave.85 The equally admirable Paul Langford
makes a similar assertion about the later flowering of charity in England. The hospitals
and foundling homes of the 18th century were “built on a foundation of bourgeois sentiment mixed with solid self-interest.”86 Ah-hah. Caught again being prudent. The Dutch
and English bourgeoisie were not really charitable at all, you see. They were simply
canny. The rascals.
Such arguments would not persuade, I think, unless one were determined to find
a profane rather than a sacred cause for every act of charity. 100 percent. When the arMcCants 1997, p. 201f.
Israel 1995, p. 352.
84 p. 355? check page.
85 Israel, p. 358.
86 Langford, p. 136.
82
83
45
gument is made it is it usually unsupported by reasoning and evidence. McCants does
offer reasoning and evidence for her cynical view, but that is what makes her book unusual. Most other historians, even Israel and Langford, don’t. The lack of argument in
even such excellent scholarship indicates that the cynicism is being brought into the history from the outside. And no one, even such gifted historians as Israel and Langford
and McCants, explains exactly how “social control” or “self-interest” was supposed to
result from giving large sums of money to the poor. It often hasn’t. But in any event no
historian tells how, or offers evidence that the how in fact was efficacious in the Dutch
case. A hermeneutics of suspicion is made to suffice.
But it doesn't compute. The question arises, for example, why other nations did
not have the same generous system of charity—that is, if it was such an obviously effective instrument of social control, requiring no proof from the historian, or if it was so
very self-interested that any fool could see its use. The acts of love, justice, and, yes,
prudence were in any case astonishingly widespread in the Netherlands, and became so
a century later in England and Scotland. Israel ends his discussion by implying that in
1616 fully twenty percent of the population of Amsterdam was “in receipt of charity,”
either from the town itself or from religion- or guild-based foundations.87 The figure
does not mean that the poor got all their income from charity, of course, merely that one
fifth of the people in the city received something, perhaps a supplement. Jan de Vries
and Ad van der Woude, who are better at dealing with statistics than Israel, put the figure lower, but still high: "In Amsterdam as many as 10 to 12 percent of all households
received at least temporary support during the winter months." The figure is high by
any standard short of a modern and northern European welfare state. De Vries and van
der Woude note that "it is the steadiness of charitable expenditure . . . that distinguishes
Dutch practice from other countries, where most financing . . . was triggered by emergency conditions.”88
Charity was by the Golden Age an old habit in the little cities of the Low Countries. Geoffrey Parker notes that by the 1540s in Flanders one seventh of the population
of Ghent was in receipt of poor relief, one fifth at Ypres, one quarter at Bruges.89 Prudential explanations of such loving justice seem tough-minded only if one thinks of
prudence as tough, always, and love as soft, always, and you for some reason want to
be seen as tough, always. But the charity was evidently no small matter. It was bizarre
in the European context. It is hard to see as prudence only.
The first large bourgeois society in Northern Europe was charitable.
*
* * *
Israel, p. 360. By the way, Israel’s figures as stated are self-contradictory: he
says that two times 10,000 people were helped in one way or another,
which amounts to 20 percent of the population of about 100,000, not the
“well over 10 percent” he settles on, unless “well over” is to mean “two
times.”
88 De Vries and der Woude, pp. 659, 661.
89 Parker 1985, p. 25.
87
46
Nor was the exceptional Dutch virtue of tolerance, dating from the late 16th century and full-blown in the theories of Grotius, Uyttenbogaert, Fijne, and especially
Episcopius in the 1610s and 1620s a matter entirely of prudence. The Dutch stopped in
the 1590s actually burning heretics and witches. This was early by European standards.
The last burning of a Dutch witch was 1595, in Utrecht, an amusement which much of
the rest of Europe—and Massachusetts, too, where Quakers were burned on Boston
Common—would not decide to abandon for another century. In the fevered 1620s
hundreds of German witches were burnt every year [GET PRIMARY SOURCE FOR THIS]. On
January 8, 1697 in Scotland one Thomas Aikenhead, an Edinburgh student, was tried
and hanged for blasphemy, aged 19, for denying the divinity of Christ—alleged by one
witness, and part of a youthful pattern of bold talk. The event was the last hurrah of
what Arthur Herman calls the ayatollahs of the Scottish Kirk (Herman date, pp. 2-10).
After that they were on the defensive, though able to block university appointments,
say, and keep skeptics like David Hume quiet.
By contrast the 13th article of the Treaty of Utrecht had stipulated 120 years before Aikenhead’s execution that “Everyone must remain free in his religion,” though of
course observing suitable privacy, since religion was till a matter of state, “and no one
should be molested or questioned on the subject of divine worship.”90 In 1579 it was a
shocking assertion, and could not be expected to be literally followed—and was not.
But by Christian standards the Dutch were then and later astonishingly tolerant. The
obvious test case was Judaism—though Catholicism, as the religion of the Spanish or
the sometimes-enemy French, was often treated with even more hostility in Holland.
That same Grotius, who was no 21st-century liberal, advised against liberal treatment of
the Jews across the Dutch Republic. But the States General in 1619 decided, against his
advice, that each Dutch town individually should decide for itself how to treat them,
and forbad any town to insist that Jews wear special clothing.
True, it was not until 1657 that the Dutch Jews became actual, full-rights subjects
of the Republic. But by comparison with their liabilities down to the 19th century in
Germany or England, not to speak of Spain and Portugal, the Dutch Jews were exceptionally free. No locking up in ghettos at night, for example; no expulsions and appropriations. In 1616 Rabbi Uziel (late of Fez in Morocco) remarked that the Jews “live
peaceably in Amsterdam,” and “each may follow his own belief, but may not openly
show that he is of a different faith from the inhabitants of the city.”91 It is the meltingpot formula of not being allowed to wear special clothing, of the sort that in 2003 secular
France affirmed in respect of shawls for Moslem women.
And so nowadays. Since the 1960s, and after a long period of conformity to the
Dutch Reformed Church, tolerance is witnessing a second golden age in the Netherlands. Outside the train station in Hilversum, the center for Dutch radio and TV, stands
a block of stone representing praying hands, with the word carved on its sides in Dutch,
Russian, Spanish, and English. Tolerance, verdraagzaamheid (from dragen, “bear,” in the
90
91
Source. Check translation against original.
Naidler 1999, p. 11.
47
way that "toleration" is from Latin tollere). It is the central word in the civic religion of
modern Holland in the way that “equality” is in the civic religion of Sweden or “freedom” in the civic religion of the United States. That is, it does not always happen, but is
much admired and much talked of.
Dutch people react uncomfortably to praise for their tolerance, especially for the
new sort of tolerance growing among Catholics after Vatican II and among Protestants
after the decline of the Dutch Reformed Church. A society heavily influenced by
Dutch-Reform dominies, as not long ago the Netherlands was, would not be particularly tolerant of gays or marihuana, for example. Thus the anti-homosexual hysteria in the
Netherlands in 1740-42 (after which the Dutch were ashamed). But Michael Zeeman
notes that the anti-bourgeois, anti-clerical movement of the 1960s was more successful
in the Netherlands than anywhere else.92 The transformation from a church-going, respectable society, divided into “pillars” by religious group and stratified by class, into
the present-day free-wheeling Holland has been astonishing. The Dutch reply nowadays with an uncomfortable, “You don’t know how intolerant we really are.” Progressive Dutch people nowadays move directly to embarrassments—for riches, for slavery,
for imperialism, for the handing over of the Dutch Jews, for capitalism, for Srebencia,
for their countrymen’s embarrassing reaction to immigrants. “We’re not really so tolerant,” they repeat. To which foreigners now and in the 17th century reply that the Dutch
do not know how really intolerant the competition is.
In the 17th century most visitors were appalled, not delighted, by religious toleration in the United Provinces. The notion one king/one religion was still lively, and still
seemed worth a few dead heretics—one third of the population of Germany, 1618-1648,
for example. Israel notes that foreigners then as now tended to judge the Dutch character by the metropolises of Amsterdam and Rotterdam rather than by the lesser and less
liberal places.93 But even with that bias the Dutch were exceptionally tolerant by 17thcentury European standards, as they were exceptionally charitable.
Consider the events immediately following August 23, 1632. Frederik Hendrik,
Prince of Orange, took the southern and Catholic city of Maastricht from the Spaniards,
and yet permitted there for a time the continued free exercise of the Catholic religion.
The poet Vondel of Amsterdam, the Dutch Shakespeare, his family expelled when he
was a child from Antwerp for being Anabaptists, was by 1632 not yet a Catholic convert
but very active in support of Grotius and other forward thinkers in favor of toleration.
He wrote a poem for the occasion praising the Prince’s triumph and tolerance, in contrast to the dagger of the Italian Duke of Parma in Philip II’s service, who in the same
city a half century before had drunk the “tasty burgers’ blood.”
One can argue in the easy and cynical and modern way that some of Frederik
Hendrik’s tolerance came from mere prudence in a political game, especially the game
played so skillfully by the House of Orange. It is a cliché of 16th and 17th century European history that religion was used by state-building monarchs, as when Cardinal Riche92
93
Zeeman 2004.
Israel, pp. 640, 638; 535.
48
lieu arranged on behalf of a Catholic French monarchy for secret and then public subsidies to the Swedish Lutheran armies fighting the Catholic Habsburgs. Dutch politics was
dominated for a century by the question whether or not the Netherlands should become
a Christian city on a hill, as the radical Calvinists wished and as they believed they had
achieved in Geneva, in early Massachusetts, and under kings in Scotland. Against this
plan men like Frederik Hendrik, the Dutch stadhouders---in effect the elected presidents
of particular provinces, drawn usually and then exclusively from the House of Orange-- sometimes joined with the upper bourgeoisie, the regents, to counterbalance orthodox
opinion railing against tolerating the “libertines [as the orthodox called the liberals],
Arminians, atheists, and concealed Jesuits.”94 Yet at other times the Orange stadhouders
supported Calvinist orthodoxy. It depended on political convenience, one could say.
Religion, to repeat, was politics. Soon after the triumph at Maastricht, for example,
Frederik Hendrik found it convenient to abandon his liberal friends and take up again
with the Calvinists. Prudence. Maastricht was worth a mass. And Amsterdam was
worth suppressing it.
And you could say that businesspeople need in prudence to be tolerant, at least
superficially, if they earn their living from dealing with foreigners. William of Orange
had noted in 1578 that it was desirable to go easy on Calvinists "because we [Dutch] are
necessarily hosts to merchants . . . of neighboring realms who adhere to this religion."95
By the 17th century the city of Amsterdam alone had many more ships than Venice did.
By 1670 about 40 percentage of the tonnage of European ships was Dutch (and even
nowadays a third of the long-distance trucking in Europe is in Dutch hands).96 The liberal pamphleteer Pieter de la Court (of the illiberal town of Leiden), Israel recounts,
urged in 1669 “the need to tolerate Catholicism and attract more immigrants of diverse
religions. . . to nourish trade and industry.”97 Similar appeals to prudence had been
made by the pioneering liberal pamphleteers of the 1620s.
But rationalize as you will, the Dutch liberal regents and the Dutch owners of
ships had of course ethical reasons, too, for persisting, as likewise their more strictly
Calvinist enemies, the so-called Counter-Remonstrants, had as well. Both sides were in
part spiritually motivated. That people sometimes lie about their motives, or also have
prudent reasons for their acts, or are misled, does not mean that all protestations of the
sacred are so much hypocrisy. "Religion is a complex thing," wrote Trevor-Roper long
ago, "in which many human instincts are sublimated and harmonized" [thus the secularism of the age of anthropology], "and political ambition is only one among these."
When the advanced liberal (“libertine”) theorist Simon Episcopius wrote in 1627 that
only “free minds and hearts . . . are willing to support the common interest,” perhaps—
startling thought—that is what he actually believed, and for which against his pruden-
Israel 1996, p. 536.
Quoted in Zagorin 2003, p. 149.
96 1670 figures from Maddison 2001, p. 77, with a rough guess for countries not
covered.
97 Israel 1996, 639.
94
95
49
tial interests he was willing to pledge his life, his fortune, and his sacred honor.98 In
other words, perhaps it is not only his pocketbook but his spirit that was motivating
him. Not 100 percent.
This is of course obvious. It would be strange indeed to explain the more than
century-long madness of religious politics in the Low Countries after the Beggars’
Compromise of the Nobility of 1566 in terms of material interest, certainly not alone, or
even predominantly.
But in the early and mid-20th century the rhetoric of progressive history writing
always wished to remake the sacred into the profane, every time, and to see motives of
class and economics behind every professed sentiment. It was a reaction to the nationalist tradition of Romantic history writing. Thus Charles Beard’s An Economic Interpretation of the Constitution (1913) or Georges Lefebvre’s Quatre-vingt neuf (1939: The Coming
of the French Revolution) or Christopher Hill’s The English Revolution 1640 (1940). In those
times even non-Marxists such as Trevor-Roper wished to slip in at the outset a quantitative estimate of 100 percent for profane prudence. Trevor-Roper added to the concession to the sacred just quoted ("political ambition is only one among" the instincts sublimated in religion) an estimate that "in politics it is naturally by far the most potent."99
Well, sometimes. You don't know on page 3. You need to check it out, with some other
theory of human motivation than prudence-only always rules.
When the wish to see every behavior as prudence-motivated makes little scientific sense, as often in the Dutch case, it should not be indulged. The battle over toleration in the Netherlands continued. Israel observes that it was not finally thoroughly resolved in favor of tolerance until around 1700, as it was then too in England, Scotland,
France (with exceptions for an occasional trial of a father accused of trying to convert
his son from Catholicism), and the German states (with exceptions for a lush growth of
anti-Semitism). The hypothesis that European religious toleration was merely a reaction to the excesses of the 17th century was expressed explicitly by Herbert Butterfield,
for example in his posthumous book, Toleration in Religion and Politics (1980): toleration
"came in the end through exhaustion, spiritual as well as material."100 But as Peter
Zagorin points out, "unaccompanied by a genuine belief," which was the product of two
centuries of intellectual labor by his heroes Erasmus, More, Sebastian Castellio, Dirck
Coornhert, Arminius, Grotius, Escopius, Spinoza, Roger Williams, John Goodwin, Milton, William Walwyn, Locke, and Pierre Bayle, exhaustion would not have mattered.101
It didn't in France as late as 1685, in which the Edict of Nantes, after all, was revoked.
Some people in Europe were very willing to go on and on and on with their fatwas. The
Israel 1996, p. 504.
Trevor-Roper 1940, p. 3. I imagine he had this item in mind when in a preface
to the substantially unrevised edition of 1962 he mentioned "certain. . .
crude social equations whose periodic emergence will doubtless irritate
the perceptive reader" of his first book.
100 cite
101 Zagorin 2003, pp. 10, 12.
98
99
50
point is that an increasing number of people, especially in tolerant Holland, were equally willing to argue and even fight in favor of toleration.
Zagorin's 14-man list of honor is in aid of showing that ideas mattered as much
as did prudent reaction to disorder. The 14 names are the 17th- and 18th-century men to
whom he accords chapter sections in his book, How the Idea of Religious Toleration Came
to the West (2003). Six of the 14 were Dutch, and the Frenchman Bayle spent most of his
adult life as a professor in Rotterdam. That makes half.
The Netherlands was the European frontier of liberalism. Locke, finally publishing in the late 1680s, was in many respects a culmination of Dutch thinking. He spent
five years in exile there, before returning to England with the Dutch stadholder William, now also the English King, having absorbed in Amsterdam, Utrecht, and Rotterdam the results of the country’s liberal thought from Erasmus through Episcopius to
Bayle. He stayed two years in Rotterdam with the English Quaker merchant, Benjamin
Furly and was friendly with the Arminian theologian Philip van Limborch, both of
whom typified the liberal side of opinion gathered in a tolerant Holland of the 1680s.102
Locke’s very first published writings saw light in the Netherlands in the 1680s. And his
famous first essay on toleration (1689), as his pen started to flow in earnest, was first
published for van Limborch at Gouda.
Likewise in the United Provinces a wider and older Erasmian humanism was real, and persistent, and virtuous, down to the present day. The broad-church attitudes of
Erasmus had became a permanent if not always dominant feature of Dutch intellectual
life before Protestantism, and survived its excesses. In uncouth Scotland by contrast,
Huizinga notes, Calvinism descended in the mid-16th century as a 150-year night of orthodoxy, before an intellectual dawn in the early 18th century.103 In the Dutch controversies of the 17th century “Scottish” was a by-word for unethical and self-destructive
intolerance.104 In its Dutch version Calvinism “was held in check,” wrote Wilson, “by
the cautious Erasmian obstinacy of the ruling merchant class. Freedom of thought, in a
remarkable degree, was preserved. Europe . . . was to owe an incalculable debt to the
Erasmian tradition and to the dominant class in the Dutch Republic by whose efforts it
was protected.”105
All this was surely not crudely self-interested in the way that the historical materialists would wish. Charles Wilson begins his praise of “the Erasmian strain, the belief
in reason and rational argument as a means of moral improvement and a way of life”
by quoting Huizinga on such qualities as “truly Dutch.”106 That such opinions are old
and liberal does not strictly imply that they are mistaken. Cynicism about such noble
themes in history is not always, not every single time, in order. The regents, stadhouders, poets, and intellectuals acted and wrote for self-interested reasons, sometimes, Lord
Zagorin, p. 259.
Huizinga, date, “Dutch Civ.,” p. 53.
104 Israel 1995, p. 673
105 Wilson date, p. 18.
106 Wilson date, p. 17.
102
103
51
knows. But they acted and wrote for faith, hope, love, temperance, justice, and courage,
too. The Lord knows that, too.
In 1764 the English satirist Charles Churchill wrote a poem against everything he
didn't like—a long, homophobic blast against "catamites," for example, and, a commonplace at the time, against French luxury and Spanish dogmatism and Italian "souls
without vigor, bodies without force.” But he pauses in his rant to accord rare praise:
To Holland, where Politeness ever reigns,
Where primitive Sincerity remains,
And makes a stand, where Freedom in her course
Hath left her name, though she hath lost her force
Which last is to say that the Holland of the Golden Age had decayed by 1764 into a less
aggressive, though still very wealthy, place. Yet:
In that, as other lands, where simple trade
Was never in the garb of fraud arrayed
Where Avarice never dared to show his head,
Where, like a smiling cherub, Mercy, led
By Reason, blesses the sweet-blooded race,
And Cruelty could never find a place,
To Holland for that Charity we roam,
Which happily begins, and ends at home.
Charles Churchill, "The Times," 1764
ll. 185-196.
Read again to make sure this is not sarcastic
52
Chapter 5:
Yet Old England Disdained the Market and the Bourgeoisie
Yet in less progressive places the old calumnies against the bourgeoisie
continued. In England especially.
England, with Scotland in attendance, to the intense irritation of French and
German and Japanese people, has been since about 1700 the very fount of bourgeois
values. British merchants, British investors, British inventors, British imperialists, British bankers, British economists have run capitalism, passing off to their American cousins only in the 20th century. Even now, despite its long love affair with the Labour Party’s Clause IV, the United Kingdom is by historical and international standards a capitalist paradise. Despite its long “decline”---a misapprehension based on the happy fact
that once-British inventions have proven rather easy to imitate--- it remains even today
among the most inventive and innovative societies on earth.107
One view is that Englishmen have always been good capitalists, eager to learn
crossbows from Italians and gunpowder from Chinese. Maybe the people have been
individualists, as Alan Macfarlane has persuasively argued, “as far back as we may
conveniently….” In a famous book in 1979, The Origins of English Individualism, Treat
Macfarlane, including his recent work as well
But the attitude towards …. was hostile
Consider the rhetoric for and against businesspeople in England around the time
of Shakespeare and the Puritan saints, before the great alteration. Mainly of course it
was harshly and at great length against. Robert Burton wrote in The Anatomy of Melancholy (1621):
What's the market? A place, according to Anacharsis, wherein they
cozen one another, a trap; nay, what's the world itself? A vast chaos, a
confusion of manners, as fickle as the air, domicilium insanorum [abode of
madmen], a turbulent troop full of impurities, a mart of walking spirits,
goblins, the theatre of hypocrisy, a shop of knavery, flattery, a nursery of
villainy, the scene of babbling, the school of giddiness, the academy of
vice; a warfare, ubi velis nolis pugnandum, aut vincas aut succumbas [where
whether or not you wish to fight you either conquer or succumb], in
which kill or be killed; wherein every man is for himself, his private ends,
and stands upon his own guard. No charity, love, friendship, fear of
God, alliance, affinity, consanguinity, Christianity, can contain them, but
if they be any ways offended, or that string of commodity be touched,
they fall foul. Old friends become bitter enemies on a sudden for toys
and small offences. . . . Our summum bonum is commodity, and the goddess we adore Dea moneta, Queen money, to whom we daily offer sacrifice, which steers our hearts, hands, affections, all: that most powerful
goddess, by whom we are reared, depressed, elevated, esteemed the sole
107
Cite Edgerton
53
commandress of our actions, for which we pray, run, ride, go, come, labor, and contend as fishes do for a crumb that falleth into the water. It's
not worth, virtue, (that's bonum theatrale [a theatrical effect],) wisdom,
valour, learning, honesty, religion, or any sufficiency for which we are respected, but money, greatness, office, honor, authority; honesty is accounted folly; knavery, policy; men admired out of opinion, not as they
are, but as they seem to be: such shifting, lying, cogging, plotting, counterplotting, temporizing, nattering, cozening, dissembling.
Burton, pp. 352-361
Well. If many people believed this, and acted on it, a modern economy would be
impossible. My claim is that such a view---the exceptions I have said came early among
the Italians and Catalans and then the Hanseatic League and the Dutch---dominated the
public rhetoric of England until the late 17th century, of France until the middle of the
18th, and of Germany until the early 19th , of Japan until the late 19th, of China and India
until the late 20th. The belief I say is ancient, and lasts: we find echoes of it down to the
present, in environmentalist suspicious of market solutions to CO2 problems or in populist calls to bring down the CEOs and the World Trade Organization.
If the market was in fact a “theatre of hypocrisy” ruled only by lying and plotting, no one of integrity would want to be part of it. The self-selection would drive out
all faithful people, by a mechanism economists call the “lemons” effect. If the only automobiles that come to the market are those that are working badly and therefore to be
sold off to suckers (having been in a serious crash, for example, though “repaired”),
then everyone will come to realize that any automobile for sale is very likely to be a
lemon. If only knaves and the men admired out of opinion, rather than who they really
are, succeed in the secondhand market for horses, then everyone will come to realize
that any horse sold by such marketeers is very likely to be impure and dissembling.
Make sure you look in the horse’s mouth.
Of course, Burton could not actually have maintained such a view without selfcontradiction. After all, he bought his ink and quills to scribble away at the Anatomy of
Melancholy in a market, and sustained himself with bread and cheese purchased with
Dea moneta. Moderns who hold such anti-market views face the same selfcontradiction, buying paper and ink in the marketplace to produce The Socialist Worker,
or driving their recently purchased Porches to their meetings to overthrow capitalism.
In Burton’s book the other 18 instances of the word “market” (all coming after the first
passage attacking the very idea) refer to market places, not this abstract concept, analogous here to Vanity Fair, and do not carry connotations of nattering by walking spirits.
Indeed, such blasts against greed are standard turns in literary performances from the
Iliad (I: 122, 149) and the prophet Amos (2:6-7; 5:10-12; 8:4-6) down to Sinclair Lewis and
The Sopranos. In its very conventionality, though, Burton’s paragraph typifies the obstacle to modernity modern economy. The satisfying sneer by the aristocrat, the lofty
damning by the priest, the corrosive envy by the peasant, all directed against markets
and the bourgeoisie, conventional in every literature since Mesopotamia, long sufficed
to kill economic growth.
54
This needs to be worked in: The Elizabethan world picture, and the Great
Chain of Being, was an "ideology," a system of ideas supporting those in power. I prefer the word “rhetoric.” Elizabeth gave a short speech in Latin to the heads of Oxford
University on September 28, 1592, ending with “Each and every person is to obey his
superior in rank. . . . Be of one mind, for you know that unity is the stronger, disunity
the weaker and quick to fall into ruin” (Elizabeth 1592, p. 328). It does not entirely disappear even in England—a point that the English historian David Cannadine makes—
but by 1776 it does become much less prominent than it was in 1600, this obedience to
superiors as the chief political principle. In the United States nowadays, for example, it
is believed chiefly by certain restricted members of the country club.
As a result, in Shakespeare's England the economic virtues were not at all respectable. Sneered at, rather. The only one of Shakespeare’s plays that speaks largely
of merchants offers no commendation of thrift. Shylock's "well-worn thrift" is nothing
like an admired model for behavior. It is the lack of thrift in aristocratic Bessanio, the
"disabling of his estate," itself viewed as amusing and blameless—since had he but the
means he could hold a rival place with Portia's wealthy and aristocratic suitors—that
motivates the blood bargain in the first place. No blame attaches, and all ends well, except for the Jew.
This does not mean that Shakespeare's contemporaries were not greedy. But
their greed expressed itself in an aristocratic notion that Lord Bessanio simply deserved
the income from his lands or borrowings or gifts from friends or marrying well or any
other unearned income he could assemble, and then gloriously spend. Shylock was to
be expropriated to enrich others---never mind such bourgeois notions as incentives to
thrift or work. The gentry and especially the aristocracy in Shakespeare's England discounted bourgeois thrift, and scorned the bourgeois work that earned the income to be
thrifty about. Gentlemen, and especially dukes, did not trouble to pay their tailoring
bills. As late as 1695 the English economic writer Charles Davenant complained that "if
these high [land] taxes long continue, in a country so little given to thrift as ours, the
landed men must inevitably be driven into the hands of . . . usurers."108 The unthrifty
were the landed English gentlemen puttin' on the style. Francis Bacon had been in
Shakespeare's time the very type of such a man, given to "ostentatious entrances, arrayed in all his finery, and surrounded by a glittering retinue," chronically unthrifty,
always in debt, and tempted therefore to misuse the Lord Chancellor's mace when finally his ambition achieved it, by soliciting bribes from both parties in legal disputes. 109
About the same time as Bacon's disgrace, a prudent temperance had made Plymouth
Colony and Massachusetts Bay succeed where Jamestown had failed. The adventurers
of Jamestown were gentlemen, not thrifty Puritans.
All of Shakespeare’s works record an aristocratic refusal to calculate. Think of
Hamlet's indecision, Lear's proud impulsiveness, King Leontes' irrationalities in A Winter's Tale. Such behavior is quite unlike the prudent examining of ethical account books
108
109
Quoted in Charles Wilson, TITLE, 1965, p. 155-56.
Jardine and Stewart, Hostage of Fortune, 1998, p. 433.
55
even in late and worldly Puritans like Daniel Defoe, or in their even more late and even
more worldly descendants like Benjamin Franklin. What is correct in Weber's emphasis
on worldly asceticism is that the Puritans wrote a good many fictions such as autobiographies stressing it.
*
*
*
*
It’s not just in Shakespeare that a modern bourgeoisie and his market activities
are sneered at around 1600 in soon-to-be-bourgeois England. Of Thomas Dekker’s play
The Shoemaker’s Holiday (1599) the literary critic David Bevington recently declared that
“no play better celebrates bourgeois London.”110 But consider. Its hero, Simon Eyre
(c.1395–1458), was historically a draper who rose to be mayor of London, though in the
comedy, which was very successful (it was played before the Queen and its acclaim is
said to have provoked Shakespeare to write The Merry Wives of Windsor), Eyre is a “professor of the gentle craft” of shoemaking. The absurdity of calling such an humble job
as shoemaking “gentle” is drawn on again and again in the play (1:30, 1:134; 1.219; 3.4,
3.24; 4:47; 7:48). Eyre’s curious catch-phrase, “Prince am I none, yet am nobly born,”
taken in form from Orlando Furioso and in the idea’s application to Eyre and the “gentle
craft” from a contemporary novel, underlines the extent of Eyre’s rise in the social hierarchy.111 His very name, Eyre, is a homonym of Dutch eer and German Ehre, “honor.”
But the focus then is honorable hierarchy and its stability, not the widespread
bourgeois upheavals, “creative destruction,” to be commended in the 18th and especially the 19th centuries. We are in a world of zero sum. Eyre starts in The Shoemaker’s Holiday as a jolly and indulgent master, who deals sharply only once (7.74, 77-78), and this
in a minor matter involving how much beer he is going to buy in order to over-reward
his workers. He stays that way. Though he rises quickly to alderman, sheriff, and Lord
Mayor, right to the end of the play he speaks in prose, the convention of Elizabethan
drama being that the comic figures below the gentry and nobility spoke thus, and noblemen and noblewomen or otherwise elevated figures spoke in blank verse. His journeyman Ralph Damport, for example, is bound for military duty in France, which ennobles a man: as Henry V says before Agincourt, “For he today that sheds his blood
with me / Shall be my brother; be he ne’er so vile, / This day shall gentle his condition.” Ralph’s wife Jane, nobly resisting the courting by a gentleman while her husband
is at the wars, also rises above the commonality of prose. Ralph, who has lines in the
play only after his mission in the army is decided, speaks in blank verse---until he returns from the wars a sad and comical cripple: then it’s back to prose for poor demobbed and denobled Ralph (18.15).
The reinforcement of the great chain of being appears all over Elizabethan and
early Jacobite drama, and shows even in its rare exceptions. The bizarre feature of both
Barabas in Marlowe’s The Jew of Malta and Shylock in The Merchant of Venice is their eloquence before their social superiors. As Lynne Magnusson points out, comic effect in
Shakespeare is often achieved by the middling sort trying to speak posh, and disastrous110
111
Bevington 2002, p. 483.
McNeir 1938.
56
ly failing.112 And lower commoners stumble even more amusingly in speaking to social superiors—like Dogberry in Much Ado About Nothing, and always, always in
prose.113 Barabas and Shylock have no such problem, and always speak in blank verse
check. The very limited experience of Englishmen with the despised Jews—they were
not readmitted until DDDD, having been expelled from England in DDDD—must
have made the contrast with the low comic figures doubly impressive.
In the Shoemaker’s Holiday (date) Rowland Lacy, nephew of the very grand Earl
of Lincoln, disguises himself as Dutch “Hans” in order to court Rose Oatley, daughter
of Sir Roger Oatley, Lord Mayor at the beginning of all this. (The “Lord” Mayor is so
called because he becomes a knight; perhaps in keeping with the historical facts about
Simon Eyre, the playwright never raises him to Sir Simon, and so never lets him speak
blank verse.) “Hans” speaks in comical Anglo-Dutch, again in prose (the playwright’s
name, “Dekker,” is Dutch, meaning “Thatcher,” and the Dekker shows accurate
knowledge of the language of that merchant republic). But when “Hans” is revealed as
Rowland Lacy the cousin of an earl, to be knighted at the end by the king, it’s back to
verse again. And so throughout, every character carefully slotted into the Great Chain
of Being. Eyre and his sharp-witted wife Margery for example use the familiar “thou”
(like tu in French) to address the journeyman shoemakers, but the formal “you” with
their superiors (and “you” for plurals at both registers: vous).
Payment pops up all over the play. The stage direction “giving money” is second only to “enter” in frequency. Bourgeois, yes? No. In keeping with the emphasis
on social hierarchy in the play and in the times it was written, the money transfers are
almost always payment by a superior to an inferior, expressing hierarchy, in the nature
of a tip. So again we do not have a celebration of “bourgeois” in a capitalist sense, but a
celebration of traditional hierarchy. Eyre gives tips to Ralph on his way to war, as the
foreman Hodge and another journeyman immediately also do (1.218, 225, 229). When
Eyre becomes sheriff, the cheeky journeyman Firk bringing the news gets tipped by
Mrs. Eyre (10.132). The lordly Lincoln in the opening scene describes with irritation
how he supplied his ne’er-do-well nephew (the romantic lead, Rowland Lacy/”Hans”):
“I furnished him with coin, bills of exchange,/ Letters of credit, men to wait on him.”
Forty lines later the Lord Mayor Sir Roger Oatley promises to get the aldermen to
shower £20 on Rowland the noble if he will but take up his commission and fight in
France (Oatley wants the wastrel safely away from daughter Rose, the usual comic material of thwarted lovers getting around their rich fathers). That’s a considerable sum,
well over a skilled workman’s yearly wages: think of $50,000 nowadays. The £20 gets
circulated another forty lines later by Rowland himself to undermine the elders who
gave it. Likewise the gentleman Hammon offers the same sum, £20, to Ralph back from
the wars if he’ll give up his loyal wife Jane to Hammon. It’s no go, of course, and
Hammon then immediately proves his nobility by giving the couple the £20 anyway
(18.97). The Earl of Lincoln and Sir Oatley keep trying to make cash work against love
112
113
Magnusson 1999, p. 120.
Cf. Magnusson 1999, p. 120.
57
(8.49, 9.97: these both to the same “noble,” that is, blank-verse chap; again at 16.97 cash
payment tries to work against love and fails).
So the middle class is held in its subordinate realm of prose, and accepts it with
good grace. Money transactions have nothing to do with business, much less the financing of creative destruction, but rather with reinforcing status differentials, such as
the two lordly types reaching down to bribe their lower status subjects. Or to put it another way, money is bullion in the style of mercantilists such as the economic thinker
Thomas Mun, who was a contemporary (as Peter Mortenson observes). “One man’s
loss becomes another man’s gain,” said Mun, Holland rising while England declines.114
Money circulates in aid of hierarchy but does not lead to specialization and innovation.
It’s not capitalism in its outcome of modern economic growth that’s being celebrated
here.
The modestly positioned Simon Eyre does become Lord Mayor. How? By sheer
luck, as though a shoemaker had won the Illinois State lottery. As the playwright of
course knew, to be an alderman, sheriff, and especially mayor of London required considerable wealth already accumulated. One had to put on a good show, and exhibit liberality, an aristocratic virtue praised then at all levels of English society. Eyre reflects
on good luck: “By the Lord of Ludgate, it’s a mad life to be a lord mayor. It’s a stirring
life, a fine life, a velvet life. . . . This day my fellow prentices of London come to dine
with me too; they shall have fine cheer, gentlemanly cheer. I promised . . . that if ever I
came to be mayor of London, I would feast them all; and I’ll do’t, I’ll do’t, by the life of
Pharaoh. By this beard, Sim Eyre shall be no flincher” (17: 38-49, italics supplied). He
promises “gentlemanly” cheer, such as idle gentlemen give and get.
Eyre gets rich in the traditional story by chancing on a wrecked Dutch ship,
whose contents he buys cheaply and sells dearly. This is mercantilist zero-sum: one
man’s misfortune is another’s enrichment. In the version told in Thomas Deloney’s contemporary novel, The Gentle Craft, Part I (1597, two years before Decker’s play, and a
source for him; for example it was the source of the “Prince am I none” tagline mentioned above), it is Eyre’s wife who sees the entrepreneurial opportunity and urges him
on. She “was inflamed with the desire thereof, as women are (for the most part) very
covetous. . . . She could scant find in her heart to spare him time to go to supper for
very eagerness to animate him on to take that bargain.”115 As Laura Stevenson
O’Connell put it in a path-breaking article on these matters in 1976, “by attributing all
the ingenuity to Mistress Eyre, Deloney can celebrate Eyre’s later achievements as a
wise, just, and charitable rich man without having to portray him at first as an entrepreneur
who has sullied himself by conjuring up a questionably honest business deal.”116
In Puritan England, O’Connell explains, “The godly rich man was not a man who
was engaged in the pursuit of wealth; he was a man already wealthy.” “The calling of
the rich man was the calling of the public servant, preacher, or teacher,” as it had alCite Mun exactly.
Deloney 1597, quoted in O’Connell 1976, p. 13.
116 O’Connell 1976, p. 14, italics supplied.
114
115
58
ways been.117 The English clerisy in the 19th century, portrayed by George Eliot in 187172 as seeking a calling in a commercial land, reverted to the earlier and Puritan model.
O’Connell criticizes the great Marxist historian Christopher Hill, “who does not realize
that once a man reached a certain point of affluence, the Puritans” [and the other English people of the time, and the Israelites and the Romans and the medieval Christians
and the 19th-century clerisy and the Carnegies and the Warren Buffetts and the Bill
Gates’s] “insisted that he be diligent in a calling which involved not making money, but
spending it.”118 William Perkins, a Puritan preacher at the University of Cambridge
whose numerous works were published in 1616-1618, declared that “if God gives abundance, when we neither desire it nor seek it, we may take it, hold it, and use it. . . . But [the
businessman] may not desire goods. . . more than necessary, for if he doth, he sinneth.”119
And so in the plays and novels of the time. In fact, so also always in plays and
novels, by tendency. Deloney, who died around 1600, speaks in his last bourgeois novel of a Thomas of Reading, a good rich clothier, but tells nothing of the entrepreneurial
activities leading to his wealth, only of his acts of charity and good citizenship after acquiring it. “Far from using the preacher’s approval of abundant wealth and diligent
work as a doctrine which encourages poor boys to make good,” writes O’Connell, “Deloney uses Puritan morality as a retreat from the spirit of capitalism.”120 Contrast the
encouragement to poor boys to make good in Horatio Alger’s novels, such as Struggling
Upward, or Luke Larkin’s Luck (1868). The title contains both the struggle and the luck.
But a good start in business life does not descend upon Luke, “the son of a carpenter’s
widow, living on narrow means, and so compelled to exercise the strictest economy” (p.
1), without tremendous struggling upward, fully 144 pages of it, in which he is industrious, polite, resourceful, and on and on---though not, again, entrepreneurial in the
larger sense that made the modern world. Alger, the son of a minister, a graduate of
Harvard, and a minister briefly himself until he embarked on his writing career in 1867,
knew little of the business world. His boys get their start by impressing an older man--in Struggling Upward Luke impresses a Mr. Armstrong, named a “capitalist.”
The imaginers of capitalism, or the ministers critiquing it, or the writers of 135
novels for boys, didn’t ordinarily know capitalism from practicing it. Unlike love or
even war, activity in business stops the telling. In Multatuli’s Max Havelaar (1860; it was
so to speak a Dutch Uncle Tom’s Cabin) the first narrator, a comically self-absorbed dealer in coffee (the most famous opening line in Dutch literature is “I am a dealer in coffee,
and live at 37 Lauiergracht”), explains with some warmth why he had previously not
engaged in such an unbusinesslike business as writing novels. “For years I asked myself what the use of such things was, and I stand amazed at the insolence with which a
writer of novels fools you with things that never happened and indeed could never
happen. If in my own business. . . I put out anything of which the smallest part was an
O’Connell 1976, pp. 8, 7.
O’Connell 1976, p. 5.
119 quoted in O’Connell, pp. 3-4, my italics.
120 O’Connell 1976, p. 18.
117
118
59
untruth---which is the chief business in poetry and romance--- [my competitor] would
instantly get wind of it. So I make sure that I write no novels or put out any other falsehoods.”121 Then the merchant-narrator proceeds to write just such a novel---though
ironically again, no “falsehoods” in truth, but an exposé of the horrors of Dutch colonialism in Indonesia.
In The Shoemaker’s Holiday luck elevates Eyre in the Great Chain of Being. Numerous people above him in the chain just happen to die, and his wife and his foreman
put the shipwreck deal in front of his nose. Mortenson notes that Dekker’s play is a
version of the pastoral, shifted to London; yet that off stage throughout the play there
occur highly unpastoral wars (which cripple Ralph; and to which Lacy honorably adjourns at the end), deaths (aldermen especially), and the losses of the Dutch merchant
that enrich Eyre. As Mortenson puts it, “Dekker creates a grim world and encourages
us to pretend that it is a green one” (Mortenson 1976, p. 252).
In a world after Eden, God gave Eyre abundance, and he of course gives it back.
Bevington notes that “his ship literally comes in.”122 Mortenson and Bevington would
agree that such proletarian ideas of enrichment---the novelist Deloney was a silk weaver
by trade, no haut bourgeois---have little to do with the entrepreneurial bourgeois
praised in the 18th and especially in the 19th century. The playwright Dekker praises the
middling sort, but praises in 1599 nothing like its remote descendents, the Manchester
manufacturers, or even the projectors and inventors of contemporary Holland---soon
too, in England, to be the admired bourgeois. As to the rhetoric of the economy, Dekker’s play is conservative. The machinery differs entirely from that in a pro-bourgeois
production in English after about 1690.
121
Multatuli 1860 reprint date, p. . By the way, the real name of Multatuli Latin for “many
things have I borne” was like the Elizabethan dramatist “Dekker.”
122 Bevington 2002, p. 484.
60
Chapter 6:
And So the English Bourgeoisie
Could Not “Rise”
The chapter is very raw and confused at present.
The elite continued to sneer at the bourgeoisie. It is by now widely realized that
the
in Europe, with its increasingly literate and even rhetorically cultivated
elite, came to view the keeping and finding out of secrets as a suitable occupation for a
nobility recently disemployed by the invention of peasant armies with guns. Compare
the making over of the samurai in Japan a century later into a Confucian bureaucracy in
support of the Tokugawa state—though the samurai remained a bureaucracy with the
right to use their swords on commoners at will, the commoners themselves having in
the meantime been disarmed. In Japan and especially in Europe not swords but talk
became the chief weapon of class. The English gentleman by 1600 is eloquent, not a
mere fighter. . NNN speaks of the "displacement of masculine agency from [military]
prowess to [diplomatic and political] persuasion" in the 1560s and 1580s in England and
France.123 Lord Essex’s last communication with Elizabeth before she had him executed
for treason was a poem. No English lord during the Hundred Years War would have
written poems to his ex-mistress and queen. Most of them left writing to clerks. check
Jardine notes the suspicion generated if the intelligence is in the wrong hands:
"The figure in the [Elizabethan] drama of the diabolical merchant-usurer-intelligencer
is. . . a consolidated cultural manifestation of such an unease concerning mercantilism
and deferred profit."124
Alan Stewart summarizes it as "there were in early modern England dramatic
uncertainties about the power of information and those who possessed it. "125 Literally
"dramatic": they were the impulses behind Elizabethan plays. The secrets of merchants
in particular were detested. "The taint of usury constrained mercantile activities"
(Jardine 1996, 107).
Lynne Magnussson 1999, p. 124:
Jean-Christophe Agnew has argued in the marxisant way usual in departments
of literature that the Elizabethans were right to be suspicious of markets. From the late
16th to the middle of the 18th century “a volatile and placeless market” caused what he
calls a “crisis of representation.” Agnew emphasizes how money---which he appears
to think is a novelty in the England of 1600---eroded face-to-face transactions “into two
16th-century
[Usurer's Daughter, p. 89].
Jardine 1996, p. 103
125 quoted in Jardin 1996, p. 105
123
124
61
mutually indifferent acts: exchange of commodities for money, exchange of money for
commodities; purchase and sale. ” “Commodity exchange was gravitating during the
sixteenth and seventeenth centuries toward a set of operative rules that fostered a formal and instrumental indifference among buyers and sellers. ” A “logic of mutual indifference” kills reciprocity---shades of Karl Polanyi. as comes to define the exchange
transaction.
This is quite mistaken, depending on a Polanyan account of the English economy
before 1800 and a "competitive" reading of capitalism. Contrary to all this, the historian
of the Bristol Merchant Venturers, David Sacks argues that “the new forms of commercial organization that emerged in Bristol during the sixteenth century depended … upon the existence … of close personal ties and the mutual trust they engendered among
overseas merchants.'"126 Among gentlemen the "pleasuring style" of letters used a rhetoric of asked favors, granted instantly out of noble friendship. But merchants, too, used
it most vigorously: there may have been a "logic" of mutual indifference, but like
Hobbes' "logic" of the war of all against all it was a mere logic, not an actual practice of
properly socialized merchants with complicated and risky deals in mind. As Sacks,
puts it, “nothing could be further from the truth . . . [that] the mercantile profession . . .
[was] composed of isolated individuals, each single-handedly confronting the pitfalls of
the marketplace." [quoted in Magnusson 1999, p. 130] “Rather than plying their trades
alone," Sacks continues, "Bristol's merchants habitually aided one another by dealing in
partnership, by serving as factors and agents, by acting as intermediaries in the delivery
and receipt of coin or goods, and by jointly transporting merchandise” (61). “Shakespeare,” writes Magnusson summarizes still another student of these matters, Michael
Ferber, “brings together in Antonio's portrayal a number of ideological discourses incompatible with Elizabethan realities in order to invent and celebrate an idealized version of mercantile enterprise separated from finance capital and consonant with Christian and aristocratic values."127
Magnussson, however, disagrees that the fulsome and “aristocratic” rhetoric of
friendship was foreign to merchants. To think otherwise is, as in Agnew, to let our desire to see merchants as "rational" get in the way of seeing them as humans. The merchant, especially abroad, was wise to use humility. John Browne's The Marchants Avizo
(1590) advises the young merchant “in any case show your self lowly, courteous, and
serviceable unto every person: for though you and many of us else may think, that too
much lowliness bringeth contempt and disgrace unto us: yet … gentleness and humility
… will both appease the anger and ill will of our enemies, and increase the good will of
our friends.”128 This is not the advice that a young nobleman would get. Where is
that amazing letter by a nobleman attacking a merchant?
Lisa Jardine notes the parallels between market deals and medieval fealty. In
Marlowe's The Jew of Malta the Jew "Barabas's ability to generate wealth with apparent
Quoted in Magnusson 1999, p. 129. Go back to Sacks!
Magnusson 1999, p. 134. Get back to Ferber!
128 p. 3, sig. B2, quoted in Magnusson 1999, p. 127.
126
127
62
effortlessness, leading to a kind of intimacy based on dependency upon access to that
wealth." Think of fair-weather friends clustering around your local millionaire. "Although ultimately this inevitably gives way to dislike and bad faith, it briefly simulates
the kind of 'friendship' which was the basis for peer bonding and service of a more customary kind." That is, it looks liked feudal clientage, made sacred by oaths given and
received. We can't help but feel that a business deal is a bond of trust. Humans are that
way. We may know better in our more cynical moods, but "at the point of dissolution
of such a bond, both parties experience the breakdown as betrayal," as though a purchase-and-sale agreement for a condominium were a blood bond of fealty.”129
*
*
*
*
John Milton and commerce inserted here.
*
*
*
*
Susan Wells argues that a tension emerges in Jacobean “city comedies” between commerce---she views it in Marxist terms as being about “accumulation”---and celebration, which she views in Bakhtinian terms as solidarity in carnivalesque ceremonies (Wells 1981). Put a little pep into the Lord Mayor’s show. The
tension, though, is that between prudence and faith, individual money-making and
bourgeois solidarity, and characterizes every bourgeoisie in history. It’s nothing new,
or old, no signal of a transition from traditional to bourgeois preoccupations. The occupation of every bourgeois is to be prudent and faithful, together.
Contempt in theatre.
Now as I said this contempt for trade is all impossible in practice. The city of
London, by 1600 the **nth largest in Europe, on its way to being the largest by 1700,
could not have lasted a week without the steady supply of vegetables from Kent and
grain from Oxfordshire and coals from Northumberland, complements of the despised
bourgeoisie. The story I am telling is easily mistaken for another old one, “the rise of
the middle class.” That story says that the bourgeoisie always-already contains within
itself modernity, and so by simply multiplying the number of such up-to-date folk we
get the modern world. The story imparts a mechanical necessity to history, a sort of
tipping point. Get bourgeois enough and you enter the modern world. Marxism talks
like this, but so did an entire long generation of historians from the eve of World I until
well after World War II.
Of course there’s something to it. Obviously a country like Russia, with a tiny
middle class even in 1917, would not be able to modernize. . . except that it did. Obviously a country like Holland, replete with bourgeois from the 16th century on, would
129
All this, Jardine, 1996, p. 102.
63
lead the industrial revolution. . . except that it didn’t. Obviously a class like medieval
lords wouldn’t show anything like a modern interest in profit. . . except that it did.
Anyone who thinks that the idea of the rise of the bourgeoisie has more than
something to it needs to examine a classic article by the historian Jack Hexter, “The
Myth of the Middle Class in Tudor England,” first presented in 1948, appearing in an
early form in the journal Explorations in Economic History in 1950, and revised and extended in 1961. The myth he refers to particular to the Tudors is that the monarchs of
England 1485-1603 favored the middle class. He quotes Lawrence Stone who wrote in
1947, contrary to the “bourgeois Tudors” myth, that “all Tudor governments were the
most resolute theoretical opponents of . . . those new bourgeois classes from which they
are supposed to have derived most support.”130 Some bourgeois were benefited; most
were taxed, monopolized, disdained. The “privileges of the London clique” favored by
Elizabeth, Hexter writes, “hung like an anchor on other sectors of the middle class” (p.
104). In the so-called Golden Speech to the House of Commons two years before her
death she apologized: “That my grants should be grievous unto my people, and oppressions to be privileged under color of our patents, our kingly dignity shall not suffer
it. Yea, when I heard it I could give no rest unto my thoughts until I had reformed it.”
131But Hexter hits, too, a larger target, the use of a “rising middle class” to explain everything from earliest times to the present, homines novi in Rome and the character of Iraqis. “A large group of historians ascribes every major historical change in the Tudor
period---and a long time before and after---to the desires, aspirations, ideals, and intentions of the rising middle class” (p. 72). The character of the countryside, for example,
was supposed to have been changed by the coming of merchants buying into country
estates. Hexter explodes the claim that Tudor times saw a novel amount of such intrusion of bourgeois values into the relation of lord and peasant. For one thing, it has always been thus, from Horace buying up his Sabine valley to Robert Redford buying up
Montana. “Merchant transplantation to the land was a very ancient habit” (p. 94). Further, “many country folk needed no nudging from transplanted merchants to persuade
them ‘to drive the most for their profit’.” And the social advantage in Tudor times, and
for a long time after, was on the other side. The merchants facing a “flexible, vigorous,
self-confident landed aristocracy” adopted country habits, not the other way around.
“The parvenu. . . was the captive, not the conquer, of the countryside” (p. 95).
“One of the odder performances in contemporary historiography,” writes Hexter, “takes place when the social historians of each European century from the twelfth to
the eighteenth . . . seize the curtain cord and unveil the great secret. ‘Behold,’ they say,
in my century the middle-class nobodies rising into the aristocracy” (p. 80-81).
But rising in numbers or not, bourgeois values "rose." The rhetoric changed, and
especially in the late 17th century in England. Hexter is hard on R. H. Tawney, whose
“conception of the middle class has all the rigor of a rubber band” (Hexter 1961, p. 74).
The middle class in Tawney’s writings sometimes includes prosperous yeoman, and
130
131
Stone 1947, quoted in Hexter 1961, p. 100n.
Elizabeth Nov. 30, 1601, p. 339; the speech exists in multiple versions.
64
sometimes does not. It sometimes includes the gentry, and sometimes not. It would
seem that Tawney ran into trouble, as many historians have when entranced by such
statistical terms as “the middle class” or “the middling sort,” in thinking of the bourgeoisie statistically rather than rhetorically.
*
*
*
*
A wonderfully clever version of the Statistical Rise of the Bourgeoisie has been
asserted recently by the economic historian Gregory Clark, in his modestly sub-entitled
“Brief Economic History of the World,” A Farewell to Alms (2007). In one-and-a-half
pages towards the middle of the book Clark deals briskly with the numerous alternatives to his hypothesis: “Social historians may invoke the Protestant Reformation, . . .
intellectual historians the Scientific Revolution. . . or the Enlightenment. . . . But a problem with these invocations of movers from outside the economic realm is that they
merely push the problem back one step.”132
That’s a very good point, always a good point. Yes, indeed, one may properly
ask why “after more than a thousand years of entrenched Catholic dogma”---such a
view of Christian theology is a trifle lacking in nuance, but set that aside---“was an obscure German preacher able to effect such a profound change in the way ordinary people conceived religious beliefs?”
Clark, however, like doubting Pilate, does not stay for an answer. He readily
admits that “ideologies may transform the economic attitudes of societies.” But he has
no scientific interest in the causes of ideologies, unless they fit his notion of the material
inheritance of acquired characteristics (“and perhaps even the genes,” he says). So to
get rid of pesky cultural arguments he reaches immediately for a Materialist Lemma:
“But ideologies are themselves the expression of fundamental attitudes in part derived
from the economic sphere.” Only the phrase “in part,” a fleeting tribute to intellectual
balance, keeps his sentence from being orthodox historical materialism. As a pair of
historical materialists put it in 1848:
Man’s ideas, views and conceptions, in one word, man’s consciousness,
changes with every change in the conditions of his material existence, in
his social relations and in his social life. What else does the history of
ideas prove, than that intellectual production changes its character in
proportion as material production is changed?133
The intellectually temperate phrase “in part” in Clark’s sentence is not cashed in.
Rather, the check is immediately torn up. “There is, however,” Clark declares in the
next sentence, “no need to invoke such a deus ex machine” as a change in ideology, because his own Chapter 6 fully explains on materialist grounds, with its own deus ex
machina (high breeding rates among the rich), “the forces leading to a more patient, less
132
133
Clark 2007, p. 183-184, from which subsequent quotations come.
Marx and Engels 1848 1988, p. 73.
65
violent, harder-working, more literate, and more thoughtful society,” namely, the bourgeois society we all so admire. In Clark’s book, that’s the end of ideology.
What he does pay out in cold cash is a materialist explanation of the change in
English behavior. The argument goes like this:
For England. . . . 1250-1800. . . . the richest men had twice as many surviving children as the poorest. . . . The superabundant children of the rich
had to. . . move down. . . . Craftsmen’s sons became laborers, merchant’s
sons petty traders, large landholder’s sons smallholders. . . . Patience,
hard work, ingenuity, innovativeness, education . . . were thus spread biologically throughout the population. . . . The embedding of bourgeois
values into the culture . . . . [in] China and Japan did not move as rapidly
because . . . their upper social strata were only modestly more fecund. . . .
Thus there was not the same cascade of children from the educated classes down the social scale.. . . England’s advantage law in the rapid cultural, and potentially also genetic, diffusion of the values of the economically successful through society.134
The means of (re)production determine the superstructure. Rich people proliferated,
and by a social Darwinian struggle the poor and incompetent died out, leaving a master
race of Englishmen to conquer the world.
Certainly it is a bold hypothesis, and is intelligently and energetically defended.
In fact, if it were true, it would fit smoothly with my own argument that a rhetorical
change made for the modern world. Clark says that “there must have been informal,
self-reinforcing social norms in all preindustrial societies that discouraged innovation.”135 Precisely: the norms of anti-bourgeois aristocrats and clerics did discourage
capitalism, until the Venetians, the Dutch, and at last the English and Scots repealed the
norms.
Clark, admitting though he does that rhetoric may transform economic attitudes,
would nonetheless wisely urge us to push the problem back one more step: why the
rhetorical change? A very good point, always a good point. It would imply, if we were
committed to historical materialism, that some cause in the means of reproduction must be
sought for the rhetoric. Under the Materialist Lemma a rhetoric never changes independent of economics---certainly not by causes within rhetoric itself such as the invention of the novel or the logic of Pascal-Nicole-Bayle in theology; not even by such causes
as the political settlement in England of 1688 or the obsession with Protestant egalitarianism of all believers in Holland and Scotland from the mid-16th century or the ordinary
man’s involvement in politics in Holland, England, and Scotland 1585 to 1660. Any
non-economic, merely rhetorical change is always to be derived from the economic
sphere. Intellectual production changes its character in proportion as material production is changed.
Clark is a highly competent scientist, and produces much evidence with which
other scientists agree. It is important to distinguished the good arguments from the bad
134
135
Clark 2007, pp. 7-8, 11, 271.
Clark 2007, p. 165.
66
in his book, lest anyone think that the good arguments do much to support the bad.
They don’t. Much of the book is uncontroversially good, a review for outsiders what
economic historians have learned since, say, Karl Polanyi. 136 We all, we economic historians nowadays, agree that down to the 17th or 18th century England was trapped as
the world has been since the caves in a Malthusian logic: no innovation, so that more
mouths always meant, soon, less bread per mouth, and the life of man was brutish and
short. We all agree that the escape from the Malthusian trap is the most important
event in world history: “the richest modern economies are now ten to twenty times
wealthier than the 1800 average.”137 We agree that innovation, not capital accumulation, was its cause. We agree that it happened in England. We agree that in China and
especially in Japan there were some signs c. 1600 that it might happen there, and some
of us think that it was Qing and Tokugawa lack of freedom and egalitarianism that
stopped it. We agree that since then the rewards to labor have increased and the rewards to capital and land have fallen, contrary to the predictions of the classical economists, including Marx. We agree that the poor of the world have been the largest beneficiaries of the escape from the Malthusian trap. We agree, in other words, on a great
many findings from 1944 to the present that will strike the average devotee of Karl Polanyi or Louis Althusser as bizarre and counterintuitive.
What other historical scientists do not agree with, though, is Clark’s most distinctive argument, that Englishmen became by virtue of their breeding rates a race of Übermenchen living in an Übergemeinschaft. One of the few historical scientists with whom he
agrees on the matter is David Landes, whom he commends briefly for being “correct in
observing that the Europeans had a culture more conducive to economic growth,”
though Landes thinks the superior culture had more ancient sources than the breeding
rates of late medieval families. 138
There are a lot of criticisms to be made of the argument. For one thing, nonEuropean places have grown, after the example of Holland and England. For another,
non-Europeans, those Untermenschen, become astoundingly rich when they moved into
places in which bourgeois values are honored. Clark shows little interest in American
economic history, which is the main instance. He also shows little interest in his native
Scotland, which did have an Industrial Revolution, and had nothing like England’s “extraordinary stability,” partly indeed because of repeated invasions by the stabilityenjoying English. Nor does he show interest in the Irish, who when they crossed the
136
137
138
He does have a bit of a problem with acknowledging other scientists. Pages pp.167-175 take
without citation my observation McCloskey 1983 of a fall of European interest rates and
pages 232-233 my design for a decomposition of growth during the Industrial Revolution
McCloskey 1981 and throughout he uses notions of bourgeois values pp. 11, 262;
McCloskey 1994, presidential address, 2007. I detect scores of these for other authors. It
is a good, reliable way of making scientific enemies. But after all he is summarizing an
enormous scientific literature most engagingly, and if he gets any substantial number of
non-economic intellectuals innocent of economic history to grasp what happened 1600 to
the present we will, in our great-heartedness, forgive him.
Clark 2007, p. 2.
Clark 2007, p. 11,.
67
Irish Sea to staff the cotton and wool mills he investigates with such empirical imagination became instantly the good workers who couldn’t of course ever arise from such a
turbulent place as Ireland, which did not have an Industrial Revolution.
But the main failure of his hypothesis is, oddly, that a book filled with ingenious
calculations, hundreds upon hundreds of them exhibiting at a high level Clark’s historical imagination---the quality of asking questions and seeing your way to answering
them---does not calculate enough. It doesn’t ask or answer the crucial historical questions. The argument can be diagrammed like this, as four states 1, 2, 3, 4 linked by three
causal and transforming causal arrows A, B. C:
The Clark Hypothesis
1.
A.
2.
B.
3.
C.
4.
Rich breed  Rich-people’s  More patience,  Enrichment
more
values spread
work, ingenuity
of all
The two bolded states at the ends get satisfying amounts of empirical attention. Clark,
who believes that when you cannot measure your knowledge is meager and unsatisfactory, is not comfortable with literary and other “ego-document” sources, as the historians call them nowadays. And so he does not realize that written sources can themselves be counted, and in any case that how people speak is part of the empirical evidence. In consequence he does not have much to say about how one would know that
“informal, self-reinforcing social norms” of rich people had spread. Therefore he is thin
on State 2. State 3 gets more attention, sometimes of a quantitative sort---Indian workers work less, for example; and as Jan de Vries has put it there was an “industrious revolution” of more application to work in first the Dutch and then the English lands during the 17th and 18th centuries. Clark follows Mokyr and others, as I do, in emphasizing
the ingenuity of inventors in cotton and iron and so forth, and uses a table which I devised in 1981 to show that the ingenuity in England 1780-1860 was spread beyond such
heroic industries.139
What is missing are calculations justifying the little links A, B, C between the
states. Clark notes for example that in countries with ill-disciplined labor forces, such
as India, the employer doesn’t get as much output as in England, because the nonbourgeois values of the Indian workers and the employers leaves not enough “work” in
the diagram. But the “as much” and “not enough” are nothing like the 20 to 30 times
gap between poor India and rich England that he claims to be explaining. That is, Clark
has failed to show how much Enrichment depends on Work, state 4 on state 3. He hasn’t
done a calculation on the size of C. He hasn’t asked about its oomph, and so he naturally has no answer.
Nor does he do a calculation on link B, to show that state 3 depended mightily on
state 2, that, say, that ingenuity depended on the spread of bourgeois values. It’s deucedly hard to do: I myself agree the link was very important yet I can’t think of ways to
139
Cite Mokyr; the table is Clark p.233.
68
quantify it, and have had to rely instead on the meager and unsatisfactory but enormously rich and ubiquitous qualitative evidence that Clark spurns and the other students of ingenuity such as Mokyr have exploited. So Clark is not to blame that even his
admirable if strictly quantitative historical imagination is stymied by the question of
how much bourgeois values acted to increase ingenuity. Still, his methodological stridency about measurement does make it embarrassing that he doesn’t even mention that
he can’t actually measure link B. We fools like Jack Goldstone or Deirdre McCloskey,
who merely listen to what people at the time were saying about B, get a certain satisfaction that Clark is thus hoist by his own methodological petard.
In light of Clark’s methodological convictions, though, the most embarrassing
broken link is A, between “Rich breed more” and “Rich people’s values spread.” Nowhere in the book does Clark calculate what higher breeding rates could have accomplished by way of rhetorical change. It could easily be done, at any rate under his mechanical assumption about how the social construction of values works. Clark assumes
that the children of rich people are by that fact carriers of the sort of bourgeois values
that make for an Industrial Revolution. To be sure, this is an odd characterization of the
medieval or early modern relatively rich. A rich bourgeois of London in 1400 devoted
most of his effort to arranging special protection for his wool-trading monopoly. His
younger sons might well take away the lesson, repeated again and again down to Elizabethan England and your local modern protectionists, that it’s a good idea to regulate
everything you can, and quite a bad thing to let people make the deals they wish to.
And a Brave Sir Botany who had stolen his riches, say, or as a successful courtier who
had received them from Henry VIII, via the dissolved monasteries, would not automatically, one would think, transmit sober bourgeois values to younger sons. A society that
extravagantly admired aristocratic or Christian virtues could corrupt even a Medici
banker into thinking of himself as quite the lord. In a similar way nowadays an extravagant admiration for the neo-aristocratic values of the clerisy corrupts the bourgeois
child into scorning her father’s bourgeois occupation.
But leave aside the actual stories of how values are made. Clark’s lack of curiosity about the exact content of the bourgeois values he and I agree in admiring leave him,
I say, with a mechanical, if dubious, model of how values get transmitted. But suppose
the mechanical model is correct. Then a scientist of Clark’s quantitative ingenuity
would have found it trivial to calculate what the higher rates of breeding would yield in
bourgeois-minded but lower class people in the next generation. Clark doesn’t do it.
The underlying problem is that Clark wants his story to be a very long-run story,
because he has ambitions for its endogeneity, which is to say its historical materialism.
He wants bourgeois values and the modern world to arise with slow-chapped pow’r
out of a thousand years of English history. No dei ex machina, thank you very much:
by which he means sort-run events like the birth of English freedom or the Protestant
Reformation or the Scientific Revolution.
Why is it a problem for his story? Because his mechanical model of the transmission
of values works too quickly, on a scale of a century or so---not ten centuries. That puts paid to
his long-run story. He describes his central Chapter 6 as identifying “strong selective
69
processes.”140 That’s right: they are too strong for a slow story, and so his own argument turns out to be one of despised dei ex machine that work on a scale of decades or a
few generations or a century or so. If he had tried to calculate the oomph of link A he
would have caught the disastrous scientific oversight before announcing to the world
that he had solved the leading scientific question in economics. Unhappily, he did not.
Consider for example one of the bourgeois values we can measure, and Clark
does, again with his usual quantitative insight thoroughness, literacy. Male literacy in
England, Clark reports, rose from the share of the clergy in the male population in, say,
1300 (though illiterate monks were by no means unknown) to perhaps 30 percent in
1580 and to 60 percent by the time national statistics start to be possible in the 1750s.
Think about it. If you are the parent of four children, and can read, what is the transition probability that all four of your children will read? It is extremely high, at any rate
in a society that for some reason values literacy. Thus in families today “going to college” is extremely inheritable, but in one generation. Unlike my Irish ancestors, my Norwegian ancestors in Hardanger were reading by the late 16th century, and never
stopped. Why? Clearly, because of that Protestant Reformation, a literal Deus, to
which Clark in his book explaining modern Europe allots eight words. No religion,
please: we’re demographic historical materialists.
Why? Clearly, because of the spread of books and printing? Why? Clearly because of the withdrawn hand of the censor in Holland and later England.
More generally, his hypothesis in intrinsically comparative, which is a great merit, since what we wish to know is precisely why England woke up and China slept. He
is more comparative than most economic historians, and yet the comparisons he makes
the very richest Englishmen at death had twice as many surviving sons
140
Clark 2007, p. 183.
70
like Pilate does not stay to hear the answer. He cuts off the discussion with a Materialist Lemma, namely,
71
Chapter 7:
But in the Late 17th Century the British Changed
The chapter is even more scrappy than Chapter 6!
So the claim is that the British and some of their neighbors changed in their rhetoric of markets and the commercial life.
Proving rhetorical causes is not easy. “Rhetoric” means anciently the available
means of unforced persuasion. It includes among its tools logic and story, metaphor
and fact, vocabulary and statistics. It is what we do when we try to persuade people
that a life in business is good or is bad, a practice either of “mutually advantageous exchange” or of “exploitation and alienation.” There’s nothing wrong in itself, one needs
to emphasize in this anti-rhetorical age of rhetoric, with trying to persuade people of
something. And so the newspaper sense of “rhetoric” as one of the dozens of synonyms
for “lying speech” is to be set aside. In a free society we need rhetoric, that unforced
persuasion.
But rhetorical causes are harder to make persuasive or unpersuasive than material causes. When a Londoner in England’s last killing famine, in 1596, offered 6 ½
pence per four-pound loaf of bread (two times the usual price in the 1590s) there was no
gap between her words and her actions. We say that she put her money where her
mouth was. Her offer of pence for bread as she physically handed the coins to the baker
and he handed her the loaf was a “material cause” of the deal in a straightforward
sense. To express the act in fancier language, her talk to the baker (“Yes, I want to buy
that damned loaf, you bloody thief!”) was performative, a “speech act”: in saying something she did something in the world, evoked the movement of the bread. If you want
to know what she meant, merely look at the price she paid. So if you want to know that
the profits from foreign trade did not cause the industrial revolution you have a very
good start on a persuasive argument if you know the prices of tobacco and slaves and
sugar, and the physical movements the offer of the prices evoked.
The trouble with word evidence is that people---and chimpanzees and camouflaging plants---can be dishonest. That is, they can fashion a gap between what they say
and what they mean, if no material payment or other physical act is involved. “I just
love that outfit!” can mean in the right circumstances “Thank God you got rid of that
hideous orange dress!” Words---and my claim is that the initiating change was words--can be “cheap talk,” that is, merely words.
The evidence for the rhetorical change to a business-dominated civilization, then,
has to catch people talking unawares. Otherwise, if you simply ask them outright, the
people are liable to deny indignantly that they are no longer aristocratic or Christian.
72
We need verbal thermometers of the change in civilization that made the modern
world.
So start with a word once redolent of an aristocratic civilization.
Our bourgeois word “honest” once meant not mainly “committed to telling the
truth” but mainly “noble, aristocratic---after all, what true aristocrat would bother to
care about truth, when style, gesture, heroism, and social position are the life of man?”
To be sure, the modern and secondary meaning of “truth telling, whether or not of high
social rank” occurs in English as early as 1400. Yet nonetheless in good old Will Shakespeare’s time a phrase like "honest, honest Iago" mainly meant, with a certain coy ambiguity, that the lying Iago in Othello was "honorable, noble, warlike, aristocratic." The
famous definition by Sir Henry Wotton (1568-1639) of a diplomat plays on the ambiguity: “ an honest man sent to lie abroad for good of his country.” “Honest” here means
“noble, distinguished,” but dances prettily with “lie.” The old phrase in men’s mouths,
“an honest woman”---thus Desdemona in the play, repeatedly, an ironic commentary
also on her fate--preserves the original meaning of the word “honest,” with adjustments
for a woman’s place in a system of manly honor. Thus too Milton, in 1674. The one occurrence of “honest” in the second edition of Paradise Lost, commenting on Eve’s nakedness before her disobedience, is: “Then was not guilty shame, dishonest shame/ Of
nature’s works, honor dishonorable” (IV: 313f). And so to the Duke of Shaftesbury in
1713, a late occurrence in the aristocratic sense, unsurprisingly by an aristocrat looking
into what “honesty or virtue is, considered by itself.”141
In most Romance languages at the same time---English, though Germanic in
structure, is in its elevated vocabulary merely French or Latin spoken with a strange accent---the same honesty-word meant the same honorable thing---not mere truth telling.
In English, French, Italian, Spanish, and so forth the word is derived from Latin honestus
from honos, “honor, high rank.” Honestus in classical Latin never meant truth telling.
For that concept, an uninteresting one in a society obsessed with honor and nobility, the
Romans used the word sincerus (“pure”). 142
Thus honnête in 16th-century French meant what Shakespeare meant by “honest.”
In Molière’s Bourgeois Gentilhomme, sixty-five years after Othello and about the time of
Paradise Lost, the romantic lead, Cléonte, uses honnête in the ambiguous way that Shakespeare and Milton do, with much talk of honneur associated with it. The idiotic bourgeois pretender to nobility, M. Jourdain, asks Cléonte if he is a gentilhomme, which
meant “of gentle birth, an aristocrat” in the wide and purchasable sense of French society at the time, having nothing to do with the democratic and bourgeois meaning it has
since acquired in English. The Oxford-Hachette labels the French gentilhomme “historical,” with only the meaning of “gentry” or “aristocracy.” And of course the usual
French word for what we call “mister” (from old “master”), or a “gentleman” as in
141
142
Shaftesbury, Characteristics¸1713, vol. 4, p. 4.
The Latinate learning displayed here comes from the Oxford Latin Dictionary
and the old William Smith and T. D. Hall, A Copius and Critical EnglishLatin Dictionary 1871.
73
democratic phrases like “ladies and gentlemen,” is another piece of hierarchical talk
brought down to earth, “my senior, my superior,” monsieur.
Cléonte replies at length to My Superior Jourdain:
No one scruples to take the name [of gentilhomme], and usage nowadays
seems to authorize the theft. For my part, . . . I find that all imposture is
unworthy of an honest=honorable man [honnête homme], and that there is
bit of cowardice in disguising what Heaven has born us into. . . and to
give the impression of that which we are not. I was born, certainly, of
parents who held honorable [honorable] position. I achieved honor
[l’honneur] in the armed forces through six years of service. . . . But . . . I
say to you frankly [franchement, not honnêtement, as still often in French
and English, though “honestly” is taking over] that I am not at all an aristocrat [gentilhomme].
Bourgeois Gentilhomme, 1670, act 3, sc. 12.
A few lines later Madame Jourdain advises her fool of a husband, who wishes “to have
an aristocrat as son-in-law,” that “your daughter would do better to have an honest [i.e.
honorable] man, rich and well-favored [un honnête homme riche et bien fait] than a beggarly and poorly built aristocrat.”
The same is true of Germanic languages. In Shakespeare’s or Molière’s time the
same honor-code meaning of “honest” is attached to an honesty=honor-word, arising
from an entirely different root than the Latin. It has, however, almost the same modern
history. Thus Dutch eer still nowadays means “noble, aristocratic,” like English “honorable” when used among aristocrats on the dueling grounds, and figures in many
phrases remembering a society of noble hierarchy: de eer aandoen om, “do [me] the honor
of.” Or in German mit wem habe ich die Ehre zu spreken?---“with whom do I have the
honor to speak?” But in Dutch and in German the addition of –lijk/-lich (-like) yielded
an eerlijk/ehrlich that comes to mean simply “honest,“ like the modern English commendation of the truth-telling necessary for a society of merchants. Thus Danish and Norwegian aer, honor, parallels aerlig, honest. Evidence from Vondel , contrasted
with Ibsen
In other words, the really surprising fact is that both the Germanic languages and
the commercial daughters of Latin developed from their respective root words meaning
“aristocratic, worthy of honor” a word appropriate to a bourgeois society meaning instead “truth telling, worthy of trust.” In the late 17th and early 18th centuries in all these
languages the primary and older and Iago-ite meaning of “noble, aristocratic, worthy of
being honored,” fades, leaving mainly our modern notion of “that deals uprightly in
speech and act. . . that will not lie cheat or steal.”143 The title of the poem of 1705 by
Shaftesbury’s opponent, Bernard Mandeville, is The Grumbling Hive: or, Knaves Turn'd
Honest. Mandeville---who not incidentally was a Dutchman writing in English---meant
by “honest” nothing like “partaking of nobility,” but instead “not cheating,” in the
143
Oxford English Dictionary [1928], “honest,” sense 3c.
74
modern sense. He cynically condemned this not cheating as naïve and profitless: “Then
leave complaints: fools only strive/ To make a great an honest hive.”144
By 1800 at the latest many Romance and all Germanic languages use the honesty
word to mean pretty much exclusively "sincere, upright, truth-telling, reliable for a
business deal."145 In Adam Smith’s two published books, in their first editions of 1759
and 1776, “honest” means “upright” or “sincere” or “truth-telling,” never “aristocratic.”
Even a poor man, he argues in The Theory of Moral Sentiments, is constrained not to steal
by “the man within”: “there is no commonly honest man who does not more dread the
inward disgrace.”146 In the eight works of Jane Austen, written from 1793 to 1816 (including The Watsons, 1804, unfinished, and her early and unpublished Lady Susan, but
not her last, unfinished Sanditon), “honest” occurs 31 times.147 It means “upright” in six
of these 31 occasions, dominantly in the old phrase an “honest man,” but never “of high
social rank, aristocratic.” Another third of the time it means “genuine,” as in “a real,
honest, old-fashioned boarding-school” (Emma), very far indeed from “honest” as “aristocratic.” In its dominant modern sense of “truth-telling” it occurs again a third of the
time in the meaning “sincere,” and literally “truth-telling” four out of the 31 total occurrences in any meaning.
The 1934 Webster’s New International Dictionary labels “honesty” in sense 1, “held
in honor,” as archaic, with “honest” (chaste) as in an “honest woman.” It labels “honesty” in sense 1a, “honor,” as obsolete. “Honest” in the dominant sense 2 means fair, upright, truthful “as, an honest judge or merchant, [or an honest] statement” (italics supplied). A big 1987 dictionary of Italian notes that the root of onesto is Latin honestus, but
does not mention its obsolete Latin and olden Italian meaning, “noble.”148 {Do compendious German or Dutch dictionary} Honesty now means honesty.
Mandeville 1714 edition, line 409-410; “honest” in various forms occurs at lines 118,
225, 233, 257, 295, 334, as the silly virtue of a hive of bees who are neither prosperous in
economy nor great in power.
145 I wonder if the following is true: The Slavic languages in modern times, like
Spanish, appear not to have separated the two meanings as sharply. In
Czech, for example, čestný means both “honorable” and “honest,” as
does the Polish Latin-imported honorowy, meaning both noble and truthtelling. On the other hand the non-imported Polish word for "noble" is
czcigodny, cognate from the same root cześć with the Czech word, and
uczciwy note the u- is now "that will not cheat.”
146 Smith, Theory of Moral Sentiments 1759, III.3.6. The passage is reproduced in subsequent editions.
147 http://www.pemberley.com/janeinfo/novlsrch.html
148 Il Nuovo Zingarelli 1987, art. onesto, p. 1275. The first four meanings given are
in English translation 1. unwilling to violate moral law, 2. conforming to
the moral law, 3. pure, 4. just---all of which are English “honest”; with
two more: [rarely] dignified, and [obsolete] handsome. The entry does
not mention nobile, aristicratico, signorile English “noble” in the social
class sense or onorevole, venerando, onorato English “honorable” in the
aristocratic sense, ‘honored”. In the Concise Cambridge Italian Dictionary
1975 onesto does come late in the list of Italian words for “honorable” p.
449, though in the modern sense, namely, “honest,” not in the original
144
75
Translations of the New Testament register the change, though unevenly. In
many recent translations of the Parable of the Dishonest Manager into English the word
“honest” is used in the sense of “upright, plain dealing.” Thus the New Revised Standard
Version (1989) of Luke 16:8 is “And his master commended the dishonest manager.” The
New English Bible (1961) is “And the master applauded the dishonest steward.” The New
International Version (1973-1984): “The master commended the dishonest manager.”
Thus also the Weymouth NT and the World English Bible. But the New American Standard
(1960-1995), the Darby Version, and Young’s [old] Literal Translation use “unrighteous”
and Douay-Rheims and Webster’s use the more Greek-justified “unjust.” The Basic English Bible makes do with “false.”
In the earlier context in which English “honest” meant “aristocratic” the word is
never used in its modern sense of “fair-dealing.” Thus the King James (1611) version of
Luke 16:8 speaks of the “unjust,” not the “dishonest” steward, which is a literal translation of the original Greek, adikias. On the other hand, the merely seven occurrences of
“honest” in the King James, all in the New Testament, appear to mean “righteous” (in
Greek dikos, just) in the sense of following the law, of Moses or of Jesus.
In other languages with the same problem with the older meaning of “honest” it
is similar. The States’ Bible of the Dutch (1618-19) calls the steward onrechtvaardigen,
“unrighteous.” Some versions of Luther’s Bible calls him den ungetreuen Verwalter, the
unfaithful manager, a mistranslation in context (since pistos, “faithful,” occurs two verses
down in contrasting parallel to dikos), but anyway not unehrlich, modern “dishonest,”
which in 1545 would have suggested “un-aristocratic.” The modern (1912) Luther and
the Schlachter (1951) give like Dutch ungerechten, “unrighteous.” A recent translation
into Afrikaans calls the manager oneerlike, that is, “dishonest” in the modern sense, as in
modern Dutch.149 But a 1953 Afrikaans version was using the more accurate onregverdige, “unrighteous,” as do Norwegian (1930) and Swedish translations (1917).150
In French the old (1744) Martin and Ostervald (though in a 1996 revision) use “unfaithful” and the Darby uses “unjust.” The French Jerusalem uses the modern malhonnête. In Italian the steward is in the Giovanni Diodati Bible (1649) l’ingiusto fattore
and in the Riveduta (1927) il fattore infedele. No disonesto about him. The modern Catholic Vulgate uses “unfairness,” following the Greek, not the Latin for “dishonest” in the
modern sense, which would be sincerus, probus, simplex, antiques, frugii depending on the
shade of meaning. Spanish translations simply call him malo and leave it at that: the
honest/honor split is not sharp in Spanish, as one might expect in a society obsessed
with honor. Honesto in Spanish does not mean “honest=truth-telling” but “chaste,
modest, decent.”
sense of “having aristocratic honor, i.e. high rank justified by military or
other noble deeds.”
149 Bybelgenootskap van Suid-Afrika, Die Nuwe Testament en Psalms. Capetown: CTP
Boekdrukkers, 1983
150 For all this see the astonishing website The Unbound Bible,
http://unbound.biola.edu/index.cfm?method=searchResults.doSearch
76
The old civilization that ours replaced, which was dominated by warriors and
latterly by courtiers, needed above all a word for rank. Our civilization dominated by
merchants and latterly by manufacturers and recently by risk capitalists needs rather a
word for reliable truth telling. Nowadays we call it “transparency.” And so from 1600
to 1776 this new civilization in northwestern Europe came into being, in its words.
*
*
*
*
The English, I say, were notorious in the age of Sir Francis Drake and Elizabeth
herself for a proud, decidedly unbourgeois behavior. Elizabeth professed no doubt, as
the Spanish Armada sailed up the English Channel, that “we shall shortly have a famous victory over those enemies of my God, of my kingdom, and of my people.” A
Dutch businessman in 16… declared that “the people are bold, courageous, ardent and
cruel in war, but very inconstant, rash, vainglorious, light and deceiving, and very suspicious, especially of foreigners, whom they despise.”151 Of these qualities only courage
and the suspicion of foreigners survived the embourgeoisfication of England, 1689 to
the present. Jeremy Paxman, who is among the numerous tellers of the tale to use the
Dutchman’s quotation, remarks that in the late 19th century the English came to be
viewed, as having on the contrary “honesty, prudence, patriotism, self-control, fair play
and courage.”152 Evidently something had changed.
"Credit" is from creditus, "believed." Each of the hundred-odd quotations in the
Oxford English Dictionary illustrating the noun and the verb date from after 1541, and
most of the commercial quotations from the 16th century are suspicious of it. An act of
34-35 Henry VIII (that is, 1542) noted that “sundry persons consume the substance obtained by credit of other men.” Shame on them. But contrast the neutral language of
Locke in 1691: credit is merely “the expectation of money within some limited time.” A
shift in talk had taken place, 1542-1691, and a shift in the ideological support for capitalism (McCloskey, forthcoming). How did this take place?
The historian Matthew Kadane explains the shift towards bourgeois virtues with:
“various interactions with the Dutch; the slow cool-down in religious temperature
(which helps to permit the mere possibility of the demoralization of wealth) starting after the end of the civil wars and running through 1688-89; the commercialization of
London, where there is so much more to be a spectator of, and so on.”
British imitation of Dutch in late 17th C. England was just acquiring an
admiration for a bourgeois version of the virtues as Holland came to its height. …..
Sprat writes of how commendable it is that “The merchants of England live honorably in
foreign parts” (my italics), while “those of Holland meanly, minding their gain alone.”
Shameful. “Ours [have] in their behavior very much the gentility of the families from
which so many of them are descended. The others when they are abroad show that
151
152
Rye p. 7, quoted in Paxman, p. 35.
Paxman, p. 63.
77
they are only a race of plain citizens.” Appallingly plain bourgeois, those Dutch. Perhaps, Sprat notes, that is “one of the reasons they can so easily undersell us.”153 It may
be. Josiah Child arguing against guild regulation of cloth (quoted in Lipson, Hist., p.,
118, q.v.): “if we intend to have the trade of the world we must imitate the Dutch.”
And so they did, in many things: naval, financial, etc. Defeat in the Solent?
Other reasons? Use Pepys.
No. CX, Prudentia
she-philosopher.com: a Web-based research project for science & technology studies (name to be supplied!)
http://www.she-philosopher.com/gallery/atheniansociety.html
Pp. 224–5 from Charles Hoole’s English translation of Comenius’ Orbis
Sensualium Pictus, published in 1659
The English-language gloss reads:
Prudence, 1. looketh upon all things as a Serpent, 2. and doeth, speaketh,
or thinketh nothing in vain.
She looks backward, 3 as into a looking glass, 4. to things past; and seeth before her, 5. as with a Perspective-glass, 7. things to come, or the end; 6. and so
she perceiveth what she hath done, and what remaineth to be done.
She proposeth an Honest, Profitable, and withal, if it may be done, a pleasant End to her actions.
Having foreseen the End, she looketh out Means, as a Way, 8. as leadeth
to the end; but such as are certain and easie, and fewer rather than more,
lest anything should hinder.
She watcheth Opporrtunity, 9. (which having a bushy forehead, 10. & being
bald-pated, 11. and moreover having wings, 12. doth quickly slip away) and
catcheth it.
She goeth on her way warily, for fear she should stumble or go amiss.
Look into Puritans. Cf. New England: internal colonization by
non-conformists. Compare to old England. When “capitalist”? Tie to
Milton section in last chapter.
Defoe and The Spectator; the novel as bourgeois.
The voice of the novelists, beginning with Defoe, who perfected the genre in English, is
clearly bourgeois. The 18th and especially the 19th-century roman eventually comes to be
focused indeed on the bourgeois home, in sharp contrast to adventure yarns, long
called “romances,” whence the French word. A "romance" was since the middle ages a
tale of knights or shepherds idealized. The Greeks and Romans had novels on more
153
Sprat 1667, p. 88; spelling and punctuation modernized.
78
mundane matters, such as dinner parties. So from the 12th century did the Japanese, focusing on love and courtly life, and these written famously by women. But the modern
European novel is invented by Defoe, arising out of broadsheets and pamphlets giving
the news of prodigious storms and terrible murders , and a rich devotional literature.154
It is associated in every way with the middle classes, an old point in literary criticism,
and made most enthusiastically by left-wing critics from the 1930s on. A novel was a
novelity, about the middling sort.
In his recent survey of its history 1727 to 1783 Paul Langford characterizes England as by then thoroughly bourgeois, “a polite and commercial people” (in the phrase
from Blackstone that Langford uses as his title). He quarrels repeatedly with the more
usual notion that aristocratic values ruled in the age of the Whig grandees.155 The
“seeming passion for aristocratic values,” for example, evinced in the vogue for spas
(such as Bath) and seaside reports (such as Brighton), ”depended on a middle class clientele, the upper middling sorts described in Jane Austen’s novels. Britain in the eighteenth century was a plutocracy if anything, and even as a plutocracy one in which power was widely diffused, constantly contested, and ever adjusting to new incursions of
wealth, often modest wealth.” As early as 1733, Langford claims, “the shopkeepers and
tradesmen of England were immensely powerful as a class.” “Bath owed its name to the
great but its fortune to the mass of middling.”156
Something evidently happened in the late 17th and early 18th centuries. The first
voice of theorizing in English is Addison: “With The Spectator the voice of the bourgeois,’
Basil Willey declares, “is first heard in polite letters, and makes his first decisive contribution to the English moral tradition.” Addison was “the first lay preacher to reach the
ear of the middle-classes,” though it would seem that for the less high-brow middling
sort Defoe scoops him by a decade or so. “The hour was ripe for a rehabilitation of the
virtues [against Restoration cynicism], and [Addison and Steele] were the very men for
the task.”157 Decades later, incidentally, the Dutch return the favor of the Addisonian
project, under the heading of “Spectatorial Papers” in explicit imitation and against a
perceived corruption of the bourgeois virtues---French manners, effeminate men, nepotism, and sleeping late.158
LOFTIS ARGUMENT. Loftis has argued that the 18th-century theatre testifies to a new admiration for the bourgeoisie. While commending Loftis for his energy
in research the economist Jacob Viner offered "the simpler hypothesis. . . that as soon as
merchants came to the theatre in sufficient numbers the dramatists would provide fare
which would retain them as customers." Viner thus appeals to the Rise of the Bourgeoisie in its simplest economistic form—not as a rise in prestige originating in the superstructure but a rise in sheer numbers originating in the base. It is a cruder form of the
154
As J. Paul Hunter 1990 argues.
155 e.g., pp. 5, 61, 105.
156 Langford, pp. 5, 30, 107. Recheck quotations and make sure I’ve not accidentally appropriated his phrases!
157 Willey, pp. 221, 223, 228.
158 Sturkenboom 2004.
79
Clark Hypothesis. Viner may be right about the 18th century. [counter evidence in
Loftis/] But in general the relation between actual and implied audience is not so simple. [look into Wayne Booth's thinking on just this point.] Shakespeare flattered his aristocratic and especially his royal audiences, but his actual audience contained numerous merchants of London [check in Shake. literature; also % of
population that was merchant; ask John Huntington]. The director of Wall
Street (DDDD) assaulted financial capitalism, but many a financial capitalist liked the
movie [check in Wall Street Journal; Financial Times]
George Lillo, in his play at the dawn of bourgeois power, has his ideal of the
London merchant, Thorowgood, assert that “as the name of merchant never degrades
the gentleman, so by no means does it exclude him.”159 Lillo lays it on thick. In the
same scene Thorowgood on exiting instructs his assistant to “look carefully over the
files to see whether there are any tradesmen’s bills unpaid.” One can smile from an
aristocratic height at the goody-goody tendencies of bourgeois virtues. But after all, in
seriousness, is it not a matter of virtue to pay one’s tailor? What kind of person accepts
the wares of tradesmen and then refuses to give something in return? No merchant he.
Here: long section on Lillo’s,The
London Merchant. Exact
parallel with Simon Eyre in its annual performance
For a century and a half before 1848, then, between the decline of sacred holiness
called religion and the rise of profane holiness called socialism and profane faith called
nationalism, even advanced thinkers were well-disposed towards merchants and manufactures. Voltaire wrote in 1733, “I don’t know which is the more useful to the state, a
well-powdered lord who knows precisely when the king gets up in the morning. . . or a
great merchant who enriches his country, sends orders from his office to Surat or to
Cairo, and contributes to the well-being of the world.” And later Samuel Johnson:
“There are few ways in which a man can be more innocently employed than in getting
money.” And later still, in 1844, on the eve of the Great Conversion against capitalism
among American and other scholars, Emerson: “There are geniuses in trade, as well as
in war. . . . Nature seems to authorize trade, as soon as you see the natural merchant. . .
. The habit of his mind is a reference to standards of natural equity and public advantage; and he inspires respect, and the wish to deal with him, both for the quiet spirit
of honor which attends him, and for the intellectual pastime which the spectacle of so
much ability affords.”
There is no unified idea of "gentleman" that would apply without strain or selfcontradiction to 1600, 1700, and 2007. The idea of honest dealing does not come from
159
1731 [1952], p. 294.
80
"gentlemen" in the 1600 definition, that is, from proud aristocrats sneering at the very
idea of paying off their tailors. On the contrary, the meaning of "gentleman" shifts radically, in England especially after 1832/1867. The idea of honest dealing comes from
merchants and tradesmen, such as Quakers insisting on fixed prices instead of bargaining, not ever from the gentry and the aristocrats.
Adam Smith admired honesty, sincerity, candor in a way quite foreign to Shakespearean England, and bordering on the wild enthusiasm for such Romantic qualities of
faithfulness to the Self in Wordsworthian England. In the Theory of Moral Sentiments
(1759, 1790) he writes:
Frankness and openness conciliate confidence. We trust the man who
seems willing to trust us. . . . The great pleasure of conversation and society . . . arises from. . . a certain harmony of minds, which like so many
musical instruments cannot be obtained unless there is a free communication of sentiments and opinions. . . . The man who indulges us in this
natural passion, who invites us into his heart, who, as it were, sets open
the gates of his breast to us, seems to exercise a species of hospitality
more delightful than any other.
TMS, VII.iv.28, p. 337
An Othello or an Hamlet who opened the gates of his breast would invite a fatal
wound, and even in the comedies it was prudent to dissimulate.
Be careful: I am used to claiming that the mkt always existed. If so, why not
always sense of responsibility? So it's not The Mkt tout court. People were involved in markets from the Dark Ages on. It was a new sense of. . . what? Adventure? Projectors? Maybe a new sense that it was all right to be a market
person, or an acceptance of market outcomes as just. Some societies, and certainly big parts of many societies, were dominated by mercantile values: one
thinks of the Phoenecians or their offshoot Carthage; the overseas Chinese, or
indeed the overseas Japanese before they were forbidden to return; or Jews
such as Jesus of Nazareth, with his parables of merchants and makers. There's
something new in Holland c. 1600 and especially in England c. 1700 and Scotland and British North America c. 1750 and Belgium c. 1800.
81
Chapter 8:
For Example, a Bourgeois England Measured
Back to some coherence!
One countable piece of evidence that bourgeois values were becoming dominate
in England in the 17th and 18th centuries is the new, dominate role of counting in giving
evidence. It is assuredly modern. The pre-modern attitude—which survives now of
course in many a non-quantitative modern—shows in a little business between Prince
Hal and Sir John Falstaff. The scene is fictional early 15th century, and 1 Henry IV was
written in London in 1597. Either date will do.
Hal disguised in stiffened cloth had been last night one of the merely two assailants of Falstaff and his little gang of three other thieves. Falstaff had in fact after token
resistance fled in terror like his confederates. One of them, Gadshill, and poor old Jack,
re-count the episode to Prince Hal:
FALSTAFF: A hundred upon poor four of us.
PRINCE: What, a hundred, man?
FALSTAFF: I am a rogue if I were not at half-sword with a dozen of them,
two hours together.
GADSHILL: We four set upon some dozen—
FALSTAFF [to the PRINCE: Sixteen at least, my lord.
GADSHILL: As we were sharing [the loot], some six or seven fresh men set
upon us.
FALSTAFF: If I fought not with fifty of them, I am a bunch of radish. If
there were not two- and three-and-fifty upon poor old Jack, then I
am no two-legged creature. I have peppered two of them. Two I
am sure I have paid [i.e., mortally injured]—two rogues in buckram suits. Four rogues in buckram let drive at me—
PRINCE:: What, four? Thou saidst but two even now.
FALSTAFF: Four, Hal, I told thee four. I took all their seven points in my
target, thus.
PRINCE:: Seven? Why, there were but four even now.
FALSTAFF: In buckram. These nine in buckram that I told thee of—PRINCE:: So, two more already
FALSTAFF: [As swift as] a thought, seven of the eleven I paid.
PRINCE: O monstrous! Eleven buckram men grown out of two!
1 Henry IV, 2.5, lines 160-199, condensed.
Yet less than two centuries after Shakespeare's England Boswell says to Johnson:
“Sir Alexander Dick tells me, that he remembers having a thousand people in a year to
dine at his house; that is, reckoning each person as one, each time he dined there.”
JOHNSON: That, Sir, is about three a day.
BOSWELL: How your statement lessens the idea.
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JOHNSON:: That, Sir, is the good of counting. It brings every thing to a cer-
tainty, which before floated in the mind indefinitely.
BOSWELL: But . . . . one is sorry to have this diminished.
JOHNSON:: Sir, you should not allow yourself to be delighted with error.
Life, Vol, II, 1783, aetat. NN
Everyman ed., p. 456.
Again, something has changed. As Johnson wrote elsewhere, “To count is a modern
practice, the ancient method was to guess; and when numbers are guessed they are always magnified,” in the style of true Jack Falstaff, plump Jack Falstaff. 160 Johnson the
classicist knew what he was talking about. Gregory Clark has reviewed the startling
evidence that wealthy if illiterate and innumerate Romans, for example, didn’t even
know their own ages, and in the style of reported Methuselahs would grossly exaggerate,
with every sign of believing their own miscalculations, the age at death of very old
folk.161
Johnson laid it down that “no man should travel unprovided with instruments
for taking heights and distances,” and himself used his walking stick.162 Boswell reports a conversation in 1783 in which Johnson argues against a walled garden on calculating grounds, as not productive enough to bear the expense of the wall—the same calculation at the same time, by the way, was surprisingly important for the enclosure
movement in British agriculture. “I record the minute detail,” writes Boswell, “in order
to show clearly how this great man. . . was yet well-informed in the common affairs of
life, and loved to illustrate them.”163 Because of his friendship with Mr. and Mrs.
Thrale, who ran a large London brewery, he turned his quantitative mind to their
hopes. In 1778 he writes, "we are not far from the great year of 100,000 barrels [of porter
brewed at the Anchor's brewery], which, if three shillings be gained from each barrel
will bring us fifteen thousand pounds a year. Whitbread [a competing brewery] never
pretended to more than thirty pounds a day, which is not eleven thousand a year."164
No wonder that "by the early nineteenth century," as Leonore Davidoff and Catherine
Hall note, "foreign visitors [to England] were struck by this spirit: the prevalence of
measuring instruments, the clocks on every church steeple, the 'watch in everyone's
pocket,' the fetish of using scales for weighing everything including ones own body and
of ascertaining a person's exact chronological age."165
Such an idea of counting and accounting is obvious to us, in our bourgeois
towns. It is part of our private and public rhetorics. But it had to be invented, both as
attitude and as technique. What we now consider very ordinary arithmetic entered late
into the educations of the aristocracy and the clergy and the non-merchant professions.
In 1803 Harvard College required both Latin and Greek of all the boys proposing to attend. Of course. Yet only in that year did it also make the ability to figure a requireA Life, II, p. 458
Clark 2007, pp. 175-180.
162 A Journey 1775, p. 139.
163 Journey, p. 104.
164 Quoted in Mathias 1978, p. 312.
165 Davidoff and Hall 1987, p. 26.
160
161
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ment. Johnson advised a rich woman, "Let your boy learn arithmetic"—note the supposition that the heir to a great fortune would usually fail to—"He will not then be a prey
to every rascal which this town swarms with: teach him the value of money and how to
reckon with it." 166
Consider such a modern commonplace as the graph for showing, say, how the
Dow-Jones average has recently moved (cartoon: man sitting in front of a wall chart on
which an utterly flat line is graphed declares to another, “Sometimes I think it will drive
me mad.”) Aside from the “mysterious and isolated wonder” of a 10th–century plotting
of planetary inclinations, Edward Tufte observes, the graph appeared surprisingly late
in the history of counting. Cartesian coordinates were of course invented by Descartes
himself in 1637, unifying geometry and algebra, perhaps from the analogy with maps
and their latitudes and longitudes. But graphical devices for factual observations, as
against the plotting of algebraic equations on Cartesian coordinates, were first invented
by the Swiss scientist J. H. Lambert in 1765 and, more influentially, by the early economist William Playfair in two books at the end of the 18th century, The Commercial and Political Atlas, 1786 (the time series plot and the bar chart) and The Statistical Breviary Shewing on a Principle Entirely New the Resources of Every State and Kingdom of Europe, 1801 (the
pie chart; areas showing quantities; exhibiting many variables at one location), “applying,” as Playfair put it, “lines to matters of commerce and finance.”167
Obsession with accurate counting in Europe dates from the 17th century. Pencil
and paper calculation by algorithm, named after the district of a 9th-century Arabic
mathematician, and its generalization in algebra (al-jabr, the reuniting of broken parts)
depended on Arabic numerals, that is, on Indian numerals, with place value and a zero
(Arabic sifr: emptiness). The abacus makes rapid calculation possible even without notation, and mastery of it slowed the adoption of Arabic numerals in Europe and in China. Compare the state of mental computing skills among our children nowadays,
equipped with electronic calculators.
You cannot easily multiply or divide with Roman numerals. Only in the 16th and
17th centuries did Arabic numerals spread widely to Northern Europe. Admittedly the
first European document to use Arabic numerals was as early as 976. The soon-to-be
Pope Sylvester II (ca 940 - 1003) —or rather “the 2nd”—tried to teach them, having
learned them in Moorish Spain. His lessons didn't take. The merchant and mathematician Leonardo Fibonacci re-explained them in a book of 1202. The commercial Italians
were using them freely by the 15th century, though often mixed with Roman.168 But before Shakespeare’s time 0, 1, 2, 3, . . . 10, . . . 100 as against i, ii, iii, . . . x, . . . c had not
spread much beyond the Italian bourgeoisie. The Byzantines used the Greek equivalent
of Roman numerals right up to the fall of Byzantium in 1453. And still in the early 18th
century Peter the Great was passing laws to compel Russians to give up their Greek
numerals and adopt the Arabic.169
166
167
168
169
Quoted in Mathias 1978, p. 296.
Tufte, 1983, pp. 28, 32f, 44ff.
See for example Frederic Lane 1973, p. 142.
Wardley 1993
84
The bourgeois boy in Northern Italy from earliest times and later elsewhere in
Europe did of course learn to multiply and divide, somehow. He had to, and as I noted
used an abacus. Presumably the same was true earlier at Constantinople and Baghdad
and Delhi. By the 18th century the height of mathematical ability in an ordinary man or
a commercial woman was the Rule of Three, which is to say the solving of proportions:
“Six is to two as N is to three.” In Europe centuries earlier one could hardly deal profitably as a merchant with the scores of currencies and systems of measurement without
getting the Rule of Three down pat. Interest, eventually compounded, was calculated
by table. We can watch Columella in 65 AD. making mistakes with the compounding.
The logarithms that permit direct calculations of compounding were not invented until
1614 by the Scotsman Napier, who by the way also popularized the decimal point, recently invented by the Dutchman Stevin—3.5, 8.25, etc. rather than 3 ½ , 8¼ , etc.
In England before its bourgeois time the Roman numerals prevailed. Shakespeare’s opening chorus in Henry V, two years after 1 Henry IV, apologizes for showing
battles without Cecil-B.-de Millean numbers of extras. Yet “a crooked figure may
/Attest in little place a million; / And let us, ciphers to this great accompt [account], /
On your imaginary forces work.” The “crooked figure” he has in mind is not Arabic
“1,000,000,” but merely a scrawled Roman M with a bar over it to signify “multiplied by
1000”: 1000 times 1000 is a million.
Peter Wardley has pioneered for the study of numeracy in England the use of
probate inventories, statements of property at death available in practically limitless
quantities from the 15th century onward. He has discovered that as late as 1610 even in
commercial Bristol the share of probates using Arabic as against Roman numerals was
essential zero. By 1670, however, it was nearly 100%, a startlingly fast change. Robert
Loder's farm accounts, in Berkshire 1610-1620, uses Roman numerals almost exclusively
before 1616, even for dates of the month. In 1616 he starts to mix in Arabic, as though
he had just learned to reckon in them—he continued to use Arabic for year numbers,
probably because years, like regnal orders, Elizabeth II and James I, or Superbowl XVI,
are not subjects of calculation.170
Fra Luca Pacioli of Venice popularized double-entry book-keeping at the end of
the 15th century, and such sophistications in accounting rapidly spread in bourgeois circles. The metaphor of a set of accounts was nothing new, of course, as in God’s accounting of our sins; or the three servants in Jesus’ parable (Matt. 25: 14-30) rendering
their account [the Greek original uses logon, the “word” being the usual term for “commercial accounts”] of their uses of the talents, “my soul more bent / To serve therewith
my Maker, and present / My true account, lest he returning chide.” Bourgeois and especially bourgeois Protestant boys actually carried it out, as in Franklin’s score-keeping
of his sins.
We must not be misled by the absence in Olden Tymes of modern arithmetical
skills into thinking that our ancestors were merely stupid. Shepherds had every incentive to develop tricks in reckoning, as in the old Welsh system of counting, perhaps
170
Fussell, ed., 1936, passim.
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from how many sheep the eye can grasp at a glance. The myth is that all primitive folk
count “one, two, many.” Well, not when it matters, though some do because it doesn’t.
Carpenters must of course have systems of reckoning to build a set of stairs. The habit
of counting and figuring is reflected in handbooks for craftsmen from the late Middle
Ages on, the ancestors of the present-day ready reckoners for sale at the checkout counter at your Ace Hardware store. And you cannot build a great pyramid, or even probably a relatively little stone henge, without some way of multiplying and dividing, at
least in effect, multiplying the materials and dividing the work. The first writing of any
sort of course is counting, such as storage accounts in Mesopotamia or Crete and calendar dates in Meso-America and reckoning knots in Peru. In Greek and Latin the magicians of the East were called mathematici because calculation—as against the much more
elegant method of proof invented by the Greeks—was characteristic of the Mesopotamian astrologers.
Large organizations counted perforce. Sheer counts had often a purpose of taxation—St. Luke’s story about a decree from Caesar Augustus that all the world should be
taxed, for example; and in 1086 the better attested case of William the Conqueror’s
Domesday Book. We owe our knowledge of medieval agriculture in Europe to the necessity in large estates to count, in order to discourage cheating by subordinates. The
Bishop of Winchester’s N manors . . . .. cite Winchester Yields, and give example from it. We can see in such records the scribes making mistakes of calculation
with their clumsy Roman numerals. We know less about agriculture a little later in Europe because the size of giant estates went down after the Black Death of 1348-50, and
such accounting was therefore less worthwhile.
Sophisticated counting in modern times cuts through the Falstaffian fog of imprecision which any but a calculating genius starts with. Nearly universal before the
common school outside the classes of specialized merchants or shepherds, the fog, I repeat, persists now in the non-numerate. Here is a strange recent example in which I
have a personal interest. The standard estimate for the prevalence of male to female
gender crossers in the United States is one in 30,000 born males. This is the figure in The
Diagnostic and Statistical Manual of Mental Disorders, 4th edition, 1994. Let us put aside
the issue of whether it is a “mental disorder,” or what purpose of gender policing
would be served by claiming that the disorder is so very rare. An emerita professor of
electrical engineering at the University of Michigan, Lynn Conway, a member of the
National Academy of Engineering and one of the inventors of modern computer design
(after IBM fired her for transitioning in 1968 from male to female), notes that the figure
is impossibly low. It would imply by now in the United States a mere 800 completed
gender crossers, such as Conway and me—when in fact all sorts of evidence suggests
that there are at least 40,000.171
The showing of such a contradiction, like Prince Hal comments on Falstaff's
boasting exaggeration, is the kind of point a numerate person makes. The sex doctors
seem not to be modern in their quantitative habits of thought. A figure of 800 complet171
lynnconway.com
86
ed, Conway observes, would be accounted for (note the verb) by the flow of a mere two
year’s worth of operations by one doctor. Conway reckons the incidence of the condition is in fact about one in every 500 born males—not one in 30,000. It is two orders of
magnitude more common than believed by the psychiatrists and psychologists who in
their innumeracy write the Manual. Conway suspects that among other sources of numerical fog the doctors are mixing up prevalence with incidence—stock with flow, as
accountants and economists would put it. That is, they are mixing up the total number
existing as a snapshot at a certain date with the number born per year. The wrong
number justifies programs like that at the NNN at Johns Hopkins and the Clarke Institute in Toronto to Stop Them from changing gender---after all, the real ones are extremely rare, and the rest one supposes are vulgarly sex-driven.
Calculation is the skeleton of prudence. But precisely because it embodies ignoble prudence the aristocrat scorns calculation. Courage, his defining virtue, is noncalculating, or else it is not courage. Henry V prays to the god of battles: “steel my soldiers’ hearts;/ Possess them not with fear; take from them now the sense of reckoning, if the
opposed numbers/ Pluck their hearts from them.” And indeed his “ruined band” before Agincourt, as he had noted to the French messenger, was “with sickness much enfeebled, / My numbers lessened, and those few I have / Almost no better than so many
French.” Yet his numbers of five or six thousand did not prudently flee from an enemy
of 25,000 on the Feast Day of Crispian.
One reason, Shakespeare avers, was faith, as Henry says to Gloucester: “We are
in God’s hand, brother, not in theirs.” The other was courage: “’tis true that we are in
great danger; / The greater therefore should our courage be.” Shakespeare of course
emphasizes in 1599 these two Christian/aristocratic virtues, those of the Christian
knight, and not for example the prudence of the warhorse-impaling stakes that on Henry’s orders the archers had been lugging through the French countryside for a week.172
Prudence is a calculative virtue, as are, note, justice and temperance. They are cool.
The warm virtues, love and courage, faith and hope, the virtues praised most often by
Shakespeare, and praised little by bourgeois Adam Smith two centuries on, are specifically and essentially non-calculative.
The play does not tell what the real King Henry V was doing in the weeks leading up to Sunday, October 25, 1415, of course. It tells what was expected to be mouthed
by stage noblemen in the last years of Elizabeth’s England, a place in which only rank
ennobled, and honor to the low-born came only through loyalty to the nobles. Before
the taking of Harfleur (“Once more unto the breach, dear friends”), Henry declares
“there’s none of you so mean and base, / That hath not noble luster in your eyes”; and
before Agincourt: “For he today that sheds his blood with me / Shall be my brother; be
he ne’er so vile, / This day shall gentle his condition.”
Out of earshot of Henry, the king’s uncle grimly notes the disadvantage in numbers: “There’s five to one; besides they all are fresh”; at which the Earl of Salisbury exclaims, “God’s arm strike with us! ‘tis a fearful odds.” The King comes onto the scene,
172
Keggan, p. 90.
87
while the Earl of Westmoreland is continuing the calculative talk: “O that we now had
here / But one ten thousand of those men in England / That do no work today!” To
which Henry replies, scorning such bourgeois considerations, “If we are marked to die,
we are enow [enough] / To do our country loss; and if to live, / The fewer men, the
greater share of honor.”
And gentlemen in England now a-bed
Shall think themselves accursed they were not here,
And hold their manhoods cheap whiles any speaks
That fought with us upon St. Crispin’s Day.
This is not bourgeois, prudential rhetoric, and counts not the cost.
Public calculation is highly characteristic of the bourgeois world, such as the political arithmeticians of the 17th century, first in Holland and then in England and then
in France. The first person in Europe to suggest that accounting could be applied to the
affairs of an entire nation, as though the nation were a business firm, appears to have
been the inventor of the decimal point, the Dutch mathematician and statesman Simon
Stevin(us) (1548-1620), who persuaded the City of Amsterdam and the King of Sweden
to adopt double-entry bookkeeping.173 Find out more about Stevinus
As late as 1673 Sir William Temple was observing, astonished, of the Dutch that
“the order in casting up [i.e. accounting for] their expenses, is so great and general, that
no man offers at [i.e. attempts] any undertaking which he is not prepared for, and [is
not] master of his design before he begins; so as I have neither observed nor heard of
any building public or private that has not been finished in the time designed for it.”174
The English were then not slow to adopt such rationality, or at least to claim it. Pepys
again, and naval accounts. Sir William Petty announced in 1690: “The method I
take to do this is not yet very usual. For instead of using only comparative and superlative words and intellectual arguments I have taken the course (as a specimen of the political arithmetic I have long aimed at) to express myself in terms of number, weight, or
measure; to use only arguments of sense.”175 It is a manifesto of a bourgeois age.
In an economics course recently I assigned my undergraduate students, whom I
try to teach to think prudently like the Dutch of the Golden Age, the task of calculating
the costs and benefits of the automobiles that three-quarters of them operated. I suspected that American college students work many hours in non-studying jobs, skimping their learning, to pay for cars and pizzas—though come to think of it, so do their
parents. My suspicion was confirmed. Shame on them.
But it seemed only fair for the professor herself to take the test. It turned out that
the indignant professor was the most irrational owner of an automobile in the class. My
beloved seven-year old Toyota Avalon was costing me $4000 a year more than the same
services would cost to get in other ways where I live in downtown Chicago. Taxis
stream by my front door on South Dearborn Street day and night. On the other side of
the accounts a parking place off-street is $160 a month and the city’s meter maids on173
174
art. “Stevinus,” Encyl. Brit., 11th ed., 1910-11 Find out more about Stevinus
Temple, IV, p. 87.
175
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street are cruelly efficient. So I sold the car. And likewise, probably, should you. I
suggest you do the calculation, and certainly for that third car that sits outside your
house to be used, if that, once a week.
But a rhetoric of calculation since the 17th century does not mean that Europeans
actually were rational. Many social scientists following Max Weber have mistakenly
supposed they were, that a new skill with numbers and with accounts meant that Europeans had discovered true rationality. No. They discovered how to talk rationality,
which they then applied with enthusiasm to counting the number of bird seeds you
could fit into a Negroid skull and the number of Jews and Gypsies you could murder in
an afternoon. The numbers and calculation and accounts appeal to a rhetoric of rationality—terms of number, weight, or measure; only arguments of sense. But they do not
guarantee its substance.
The numbers, for one thing, have to be correct. So does the accounting framework in which they are calculated. So does the evaluative job they are supposed to do.
So does the ethical purpose of the whole. These are heavy, heavy requirements, and
any quantitative scientist knows that most people, even other scientists, commonly get
them wrong.
For example, the technique of "statistical significance" used in certain quantitative fields such as medicine and economics—though not much at all in physics or chemistry, say—turns out to be on inspection comically mistaken. Tens of thousands of earnest researchers into medicines and minimum wages persuade themselves that they are
doing a properly bourgeois calculation when in fact the calculation is very largely irrelevant to what they want to know. Like businesspeople priding themselves on economically erroneous allocating of fixed costs to various branches of their business, the medical and social scientists who use so-called t or p or R “tests” are doing more than fooling
themselves. They are killing people and ruining economies. The suspicion that "you
can prove anything with statistics" is primitive. But in field after field of the intellect,
from politicized census-taking up to double blind experiments sponsored by Merck the
primitive gibe seems approximately true, at the 5% level of significance.176
In 1713, John Nye explains in his recent history of British-French commercial relations, the British makers of drink had long benefited from the prohibition of imports
of French wine into Britain. Britain and France had just concluded their long and
bloody quarrel over the Spanish succession, and a bill in Parliament proposed therefore
to drop the wartime preferences for Spanish and Portuguese wines, to which unsurprisingly the existing importers of Spanish and Portuguese wines—there were of course no
legal importers of French ones to speak up for that trade—objected strenuously. A frantic river of pamphlets spilled out a rhetoric of accounting and quantities. It was the first
time, Nye notes, following G. N. Clark, “that the newly collected statistics on British
trade entered the political debate in a substantial way,” serving “as a basis for the mercantilists’ published statements of economic doctrine.” Note the date: in now Dutch176
If you are educated in such methods and therefore find my claims hard to believe you need to face up to them seriously. Have a look at Ziliak and
McCloskey 2007; or McCloskey and Ziliak 2008.
89
imitating England in 1713 was the first time that policy depended on numbers, this a
century after the first such debate in Holland. True?
The wine trades with Portugal, wrote one defender of the status quo, “have as
constantly increased every year as we have increased the demand for their wines, by
which means the navigation and seamen of this kingdom have been greatly encouraged.” If French wines are allowed back into Britain the navigation and seamen will be
ruined, because “small ships and an easy charge of men can fetch wines from France.”
And so “the greatest part of those ships must lie and rot, or come home dead freighted,”
resulting in a rise in freight rates on British exports, to the detriment of the country’s
treasure by foreign trade. Another British pamphleteer reckoned that “the advantage to
the French nation by having such a vent for their wines” was very great. “The French
king . . . would give a million of money to procure” it.177 Another that
formerly the king of Portugal prohibited the importation of cloth
into his kingdom. . . . [The] prohibition was taken off on consideration that Portugal wine should pay [in Britain] one third less
duty than French. . . . Should the duty on French wines be lowered . . . . we very much fear that the French king will take the opportunity of introducing his subjects’ cloth into Portugal, which
being of a thinner manufacture than the cloth of this nation, may
be fitter for that country and their Brazils. . . . We may forever
lose the cloth trade in that kingdom178
In June of 1713 the bill to relax the duties on French wine was rejected, though the quantitative arguments were all specious. The social accounting was mistaken, sometimes
positively wacko. But anyway a rhetoric of quantitative prudence ruled.179 Such bourgeois, quantitative reasoning was in Britain rare a century before, though among the
Dutch it was already commonplace in 1613. "Constantly increased." "The greatest part
of those ships." "A million of money." "One third less duty."
But I said there can be a sort of madness in the counting, and counting is no
guarantee of actual rationality. As a calculating modern person, even an economist,
before I sold my car I first went on a big shopping expedition, as my mother prudently
advised, and stocked up with $1500-worth of Barilla Thin Spaghetti and Manischewitz
Thin Tea Matzos. As an aid to such prudence I worked out little tables of equivalences,
like the builder’s ready reference book: If you use ½ a package of Quaker Instant Oats a
week, and want two-years’ worth, that’s . . . let’s see, ½ x 52 x 2 = 52 boxes. Calculation
embodies a modern sort of prudence, even when as here it is slightly mad. I still had by
actual count, three years now after the shopping spree, 11 cans of Pillar Rock Pink
Salmon, but can't find the sell-by date on them. Auden writes in 1940: "The measurable
177
178
179
Nye 2006, a page or two after last Get pages to correspond with published
book
Nye 2006, next page.
Nye 2006, p. [get cite from final volume], “the Portugal trade furnishes us
with some dying Commodities” Spelling and punctuation modernized.
90
taking charge/ Of him who measures, set at large/ By his own actions, useful facts/ Become the user of his acts.”180
What the modern fascination with charts, graphs, figures, and calculations shows
is that moderns admire prudence. It does not show that they practice it. What changed
from Shakespeare's time to Dickens' time was the rhetoric, and the social prestige of
people like merchants and engineers and economists who specialized in it. Now the
world is ruled by little else. Dickens was arguing about and against the spirit of the age
in Chapter XV of Hard Times, her father trying to persuade Louisa to marry Mr.
Bounderby by the batty citation of facts, only facts:
You are, we will say in round numbers, twenty years of age; Mr. Bounderby
is, we will say in round numbers, fifty. There is some disparity in your respective years, but in your means and positions there is none; on the contrary, there is a great suitability. Then the question arises, Is this one disparity
sufficient to operate as a bar to such a marriage? In considering this question,
it is not unimportant to take into account the statistics of marriage, so far as
they have yet been obtained, in England and Wales. I find, on reference to
the figures, that a large proportion of these marriages are contracted between
parties of very unequal ages, and that the elder of these contracting parties is,
in rather more than three-fourths of these instances, the bridegroom. It is
remarkable as showing the wide prevalence of this law, that among the natives of the British possessions in India, also in a considerable part of China,
and among the Calmucks of Tartary, the best means of computation yet furnished us by travelers, yield similar results.
180
Auden, “New Year Letter January 1, 1940," Part Three, p. 185
91
Chapter 9:
The New Values Were Triumphant
by 1848, or 1776, or Even 1710
My friend the economist Mark Blaug once said to me, in effect, "Isn't it remarkable that much of moral conduct doesn't need explicit ideology, because much of the socialization of people is tacit. Isn't it the tacit socialization at your mother's knees—and
perhaps even the biological imperative in your father's genes—that must be explained?"
Blaug's objection is similar to Geertz', though Blaug is resisting the textual study that
Geertz and I like to do. "Do we need to drone on and on about theories of ethics and
their historical change?" His remarks are anti-verbal: look for interest, he says, and instinct. Set aside the mere words.
And I answer to Blaug: I understand your scientific impatience, and agree that
some of the socialization is tacit and hardwired in humans. It seems to be hardwired at
any rate in the broad method of, say, social shaming, if not in the detailed rules about
what exactly is shameful. We are hardwired, for example, as another economist friend
of mine, Alexander Field, argues in a recent book, not to kill each other on meeting Field
**date).
But of course even in this case we can rather easily be socialized by words, even
at our mothers' knees, to kill the enemies of Rome on meeting, or at any rate at a convenient distance. The particular enemies are highly specific to a culture and time, demonized in an ideology, often explicit. An ideology of German superiority socialized
Germans to kill Poles. An ideology of British imperialism socialized Englishmen to kill
Zulus. An ideology of American manifest destiny socialized Americans to kill Sauk and
Sioux. I repeat: of course. Humans are both hard-wired and soft-wared. We can read
at least part of the software's code, because it is expressed in the lines and especially between the lines in Molière's plays and Jane Austen's novels, in Paine's Common Sense
and in Johnson's colloquies, in Candide and in The Sorrows of Young Werther.
Articulated ideology and subliminal ideology, too, as Blaug implies, rides perhaps as a little wave of talk upon deeper currents of biology or interest or the means of
production. But the little wave, too, has its own logic and its own consequences. I
think—this is no astonishing discovery, but it is where this book begins—that in northwestern Europe and especially in England the ruling ideology changed a great deal
from 1600 to 1710 and then from 1710 to 1848, from Shakespeare's time to Addison's
time, and then further to Macaulay's, with a very significant mile mark at Adam Smith
and 1776. The characteristic European site moved from an French aristocrat's estate to
an English bourgeois' town. And, I claim, the change had big consequences.
92
Contrary to Weber, Reinhold Niebuhr wrote in 1952, "Prosperity was not, according to the Puritan creed, a primary proof or fruit of virtue. 'When men do not see and
own God,' declared Urian Oakes (1631), 'but attribute success to the sufficiency of instruments it is time for God to maintain his own right and to show that He gives and
denies success according to His own good pleasure'" (Niebuhr 1952, Chap. 3, Sec. 1).
But Niebuhr sees "the descent from Puritanism to Yankee in America . . . [as] a fairly
rapid one. Prosperity which had been sought in the service of God was now sought for
its own sake. The Yankees were very appreciative of the promise in Deuteronomy:
'And thou shalt do that which is right and good in the sight of the Lord: that it may be
well with thee, and that thou mayest go in and possess the good land which the lord
sware unto thy fathers'" (6: 18). (Chap 3, sec. 1) "According to the Jeffersonians," Niebuhr contnues, "prosperity and well-being should be sought as the basis of virtue. They
believed that if each citizen found contentment in a justly and richly rewarded toil he
would not be disposed to take advantage of his neighbor. The Puritans regarded virtue
as the basis of prosperity, rather than prosperity as the basis of virtue. But in any case
the fusion of these two forces created a preoccupation with the material circumstances
of life which expressed a more consistent bourgeois ethos than that of even the most
advanced nations of Europe." Niebuhr 1952, Chap. 3, Sec. 1)
Jane Austen’s characters in her six mature and finished novels, published between 1811 and 1817, are of course smallish landholders and their pastors, the lesser
gentry, with the Army and the Navy off stage. She never portrays, or even mentions,
the real heights of the aristocracy, and her dedication of Emma to the Prince Regent was
famously forced. "3 or 4 families in a country village," she writes to her niece Anna in
1814, "are the very thing to work on."181 We hear nothing of dukes and duchesses. Her
people bring along with their rise into the lesser gentry an attitude of disapproval for
the gaming tables and dueling grounds of the real aristocracy. Part of the embourgeoisfication of England 1700 to 1848 consisted of tempering the aristocracy with bourgeois values, until dukes took to walking about in sober business suits and serving as
board chairs for corporations.
In the other direction, her servants and children are entirely silent---barely mentioned. We hear of Mrs. Charles nursery-maid, but we do not hear her speak, or hear of
the children who thronged these households---remember that Jane's mother had eight
children, six sons and two daughters. You wouldn't know that England was an astonishingly stratified society from Austen's novels---except that even within the tiny class
she examines a snobbery reigns, at least among the minor characters. This needn't matter much to a modern reader. The narrow spectrum of the English class system which
Austen examines can be refracted into whatever class arrangement we want for our
own purposes, or, still better, de-historicized entirely and left as Literature about Humanity.
181
Penelope Hughes-Hallett, ed., The Illustrated Letters of Jane Austen NY: Clarkson Potter, 1991, p. 118.
93
Yet none of Austen's characters are conventionally bourgeois. It is notable that
not a single merchant or manufacturer is so much as mentioned. The most ordinarily
bourgeois figure is Robert Martin, the farmer-suitor of Harriet Smith. Emma persuades
Harriet not to accept his offer—until the very end of the novel.
So Austen wrote in a bourgeois genre, but did not bother with tradesmen.
And yet I would say---there is nothing terribly new or shocking about this---that
our Jane is highly economistic, and in this way bourgeois. She is an advocate for both
sense and sensibility, that is, for both prudence and love among the traditional principal
virtues. In this I would say she is strikingly bourgeois. The bourgeoisie above all calculates. But the good bourgeois has sensibility, too.
Notice how impossible a carelessly aristocratic sentiment is in an Austen novel.
Responsibility, honor in the sense of keeping your word, and above all amiability play
their part, but edgy heroism of a boy's sort does not. Doubtless her brothers Frank and
Charles were gloriously heroic, and urged their sailors once more unto the breach. You
didn’t rise in His Majesty's navy of Lord Nelson and Jack Aubrey, as they both did to
the rank of admiral, without physical courage. But in Austen's world, as in the Navy,
the bourgeois virtue of prudence is an elevated virtue. It is no accident that the novel
and the science of economics, called then "political economy," grew up at the same time
and share the same atmosphere. Alessandro Manzoni, the Italian Tolstoy, devoted an
entire chapter of his masterpiece The Betrothed (1825-26, 1840; Chapter 12) to explaining
the dire consequences of interfering with the grain market. You could reprint it for
your class in Economics 101.
In Austen the admiration of prudence is undercut, of course, when it shows as
prudence only. The minor characters are often insanely prudent, mothers pushing their
daughters up the marital tree, for example, with a single-mindedness that would delight a modern economist. Lucy in Pride and Prejudice, of whom the author {who is she
channeling here?} Get it. remarks:
The whole of Lucy's behavior in the affair, and the prosperity
which crowned it, therefore, may be held forth as a most encouraging instance of what an earnest, an unceasing attention to selfinterest, however its progress may be apparently obstructed, will
do in securing every advantage of fortune, with no other sacrifice
than of time and conscience.182
Or more famously, consider Mr. Collin's proposal to Elizabeth in Pride and Prejudice, an
anticipation of Mr. Gradgrind’s argument to Louisa in Hard Times:
My reasons for marrying are, first, that I think it a right thing for
every clergyman in easy circumstances (like myself) to set the example of matrimony in his parish. Secondly, that I am very convinced it will add very greatly to my happiness; and thirdly--which perhaps I ought to have mentioned earlier, that it is the par-
182
Oxford Illustrated ed., p. 376.
94
ticular advice of the very noble lady whom I have the honor of
calling patroness.183
But the major characters never talk in this prudence-only way. Their behavior,
and their talk about their behavior, are always mixes of prudence with love and justice
and temperance and moral courage. The two virtues of the classical and Christian seven that are missing from Austen are the same ones missing also from Adam Smith--transcendent hope and faith and love of God. That is, Jane is not a Romantic novelist,
even though she concerned herself exclusively with romance, in its very recent sense of
“affairs of the heart.” She is does not take art as a model for life, and does not elevate
the artist to a lonely pinnacle of heroism, or worship the Middle Ages, or have any of
the other obsessions of Sir Walter Scott and later Romantics.
What is especially odd is that she is not, either, a Christian novelist, and her characters, whether major or minor, make little of their Christianity. Hope and faith and
love of God are Christian virtues, or so the Christians had claimed from the earliest
times. Romanticism revives hope and faith and a love for Art or Nature or the Revolution as a necessary transcendent in people's lives. But Austen never deals in the transcendent. This daughter of a clergyman, courted by clergymen, and a sister to a clergyman, and the aunt-or-great-aunt-in-law to clergymen, never once mentions God. A
friend puts it to me, “In an Austen novel you can’t spit without hitting an Anglican
clergyman.” She writes to her niece Fanny Knight, advising her on a suitor: "and as to
there being any objection from his Goodness, from the danger of his becoming even
Evangelical, I cannot admit that. I am by no means convinced that we ought not all to
be Evangelicals, and am at least persuaded that they who are so from Reason and Feeling, must be happiest and safest."184 Note the mix of Reason and Feeling, sense and
sensibility, an entire lack of understanding of the Evangelical temper. Austen was no
Enthusiast. She is a 18th-century, broad-church Anglican, bordering on deist.
It has often been remarked that Austen is bourgeois in the precise concern she
has for money. Oliver McDonagh observes that she "was accustomed from childhood
to hear money matters discussed in informed and detailed fashion; and the lessons she
learned were driven home by her own comparative poverty."185 My undergraduate
students who come from small businesses have the same grasp of the value of money.
In the same letter just quoted Jane tells the heiress Fanny that Mansfield Park has sold
out its first edition. "I am very greedy & want to make the most of it; but you are much
above caring about money," adds Aunt Jane with a sharp turn, "I shall not plague you
with any particulars."186
Samuel Johnson said that no one but a blockhead wrote except for money, and
Jane is no exception. She writes to Cassandra and Martha expressing her pleasure in
183
184
185
186
Pride and Prejudice, p.
#108, 18 Nov 1814 in R.W. Chapman, ed., Jane Austen: Selected Letters Oxford:
Oxford University Press, 1955, 1985, p. 174.
McDonagh, Jane Austen: Real and Imagined Worlds New Haven: Yale University Press, 1991, p. 44.
Chapman, ed., p. 175f.
95
making so much as £400 from writing, twenty times the average annual income of a
working family at the time---think in modern terms of royalties accumulating to
$600,000. As Marilyn Butler explains, she felt in her last six years that she was an Author, because she was making money at it.187 It was her independence, and bespoke a competence similar to that of her sailor brothers.
So Jane was an economist before the name. Economics is the science of prudence, and prudence is the chief virtue of the bourgeoisie. It is not the only virtue, say
Jane and I. A successful capitalism, I would argue, must have the virtues that Jane
praises on the other accounts.
For Austen is above all an ethical writer. Remove ethical evaluation, education,
experience from her novels and you have nothing at all. Nothing much happens, of
course. The happenings are internal. If Austen is bourgeois---and I think she is---she is
a model for a good bourgeoisness. Not sense alone, but combined with sensibility. Not
amiability alone, but also a prudent marriage. It seems impossible: as I say, she doesn't
so much as mention stockbrokers or mill owners. But so long after her death she has
assumed a special place in the ethical education of the English-speaking world ---I am
thinking of her apotheosis at the hands of the English critic F. R. Leavis in the 1930s. It
would alarm many of her readers to say so, but her kind of people are the kind we want
in our capitalist society---her major people, that is, who do not follow the modern economists, as her minor people often do, in relying on prudence only.
Two projects after Austen to be completed here:
*
*
*
*
Wright’s old Middle-Class Culture in Elizabethan England (1935) is surely still correct in claiming that the education of the English bourgeoisie during the 16th and 17th
centuries, the scholarly and even scientific habits that Deborah Harkness (2007) has recently emphasized, made the “sudden” emergence of a literate and confident class late
in the 17th and early in the 18th century less surprising.
The B character even of aristocratic talk in Britain in the age of
the man’s modern suit (use Hollander). A good case, if not
the hardest, would be the Navy. “How I made money on her,”
says an Austen character, an admiral speaking of a frigate he once captained.
(Hold the anti-bourgeois themes of Disraeli, Dickens, Flaubert, et
alii until Vol 3.)
187
Butler 1985, introduction to reissue of Chapman, ed., Jane Austen: Selected Letters, p. xxvi
96
“The gospel of work, one of the most significant articles of the bourgeois dogma,” Louis Wright declared long ago, “was promulgated with great earnestness during
the period of Puritan supremacy and paved the way for the later apotheosis of business,
which has colored the entire outlook of the modern world” (Wright 1935 p. 656). He
offers little evidence of this himself, and what matters here is how the society in general
felt about work. No doubt a merchant urged himself and his fellows to work at accounts and correspondence into the night. But as long as a gentleman is defined to have
no avocation at all, except rattling swords and composing sonnets, the turn has not been
reached.
*
*
*
*
The elevation of the middle class---to the degree that
Victoria herself behaved so:
Davidoff and Hall here, Family Fortunes: Men and
Women of the English Middle Class, 1780-1850
(1987)
Dror Wahrman, Imagining the Middle Class: The
Political Representation of Class in Britain. C.
1780-1840
And Perkin et alii.
*
*
*
*
A good thing or bad, this triumph of bourgeois virtues?
“The postclassical world,” as Berry understand Smith, “is irretrievably a world of
strangers” (Berry 1992, p. 84). Berry’s reply to communitarians such as Alasdair, MacIntyre, Charles Taylor, and Michael Walzer, with their nostalgia for civic humanism, is
essentially, “Too bad.” “We must look to the public realm for rules . . . and to the private for virtue.” One can sympathize with Berry’s position, noting the horrors that
modern “moral communities of citizens” such as under fascism or communism or nationalism have perpetrated. Berry (and old Adam Smith) have a lively appreciation of
the corruptions possible, ranging from such mild misuses of public activism as imperial
preferences and protection all the way up to the aestheticization of the public sphere in
the fascist state.
But I have another reply: that we do in a commercial world bump regularly
against strangers, but the strangers become friends. To my friends (as indeed they are) the
communitarians I say: your ends are achieved precisely by commerce.
97
Henry Maine a century and a half ago made the still-sound argument that cases
of fraud imply the existence of a general trust: “if colossal examples of dishonesty occur,
there is no surer conclusion than that scrupulous honesty is displayed in the average of
the transactions.”188 The muckrakers are liable to draw the opposite, and erroneous,
conclusion: that a fraud is typical of the whole barrel. Arthur Miller remarked on his
play, All My Sons (1947, two years before Death of a Salesman),
If the . . . play was Marxist, it was Marxism of a strange hue. Joe Keller is
arraigned by his son for a willfully unethical use of his economic position;
and this, as the Russians said when they removed the play from their
stages, bespeaks an assumption that the norm of capitalist behavior is
ethical.
Miller, 1957, p. 170.
The growth of the market, I would argue, promotes virtue, not vice. Most intellectuals think the opposite: that it erodes virtue. And yet we all take happily what the
market gives---polite, accommodating, energetic, enterprising, risk-taking, trustworthy
people; not bad people. Sir William Temple attributed the honesty of Dutch merchants
in the 17th century “not so much [to] . . . a principle of conscience or morality, as from a
custom or habit introduced by the necessity of trade among them, which depends as
much upon common-honesty, as war does upon discipline.”189 In the Bulgaria of socialism the department stores had a policeman on every floor—not to prevent theft but to
stop the customers from attacking the arrogant and incompetent staff charged with selling goods that at once fell apart. The way a salesperson in an American store greets
customers makes the point: “How can I help you?” The phrase startles foreigners. It is
an instance in miniature of the bourgeois virtues.
Even taking the calumnies of the clerks against the bourgeoisie at face value, an
ethics of greed for the almighty dollar is not the worst. It is better, for example, than an
ethics of slaughter with patrician swords or plebeian pikes. Dr. Johnson said, “There
are few ways in which a man can be more innocently employed than in getting money.”
Commenting on Johnson’s remark, Hirschman notes that “The very contempt in which
economic activities were held led to the conviction, in spite of much evidence to the
contrary, that they could not possibly have much potential in any area of human endeavor and were incapable of causing either good or evil.190” The “evidence to the contrary” was not so great in 1775. Adam Smith at the time saw only a modest growth
arising from peaceful specialization.
Donald Trump offends. But for all the jealous criticism he has provoked he is not
a thief. He did not get his billions from aristocratic cattle raids, acclaimed in bardic glory. He made, as he put it in his first book, deals, all of them voluntary. He did not use a
.38 or a broadsword to get people to agree. He bought the Commodore Hotel low and
sold it high because Penn Central, Hyatt Hotels, and the New York City Board of Esti188
189
190
Ancient Law, London 1861, p. 307: check exact page in my copy; quoted in
Searle 1998, p. 99.
Temple, Iv, p. 83.
Hirschman 1977, p. 58.
98
mate—and behind them the voters and hotel guests (and, let it be admitted, the powers
and potentates)—put the old place at a low value and the new place, trumped up, at a
high value. Trump earned a suitably fat profit for seeing that a hotel in a low-value use
could be moved into a high-value use. An omniscient central planner would have ordered the same move. Market capitalism can be seen as the most altruistic of systems,
each capitalist working to help a customer, for pay. Trump does well by doing good.
Thomas Buddenbrook becomes the head of the family and “The thirst for action,
for power and success, the longing to force fortune to her knees, sprang up quick and
passionate in his eyes.”191 But success at bourgeois occupations is success in mutually
advantageous deals, deals in which Thomas delights, not the successful slaughter or
double dealing recounted in the literature of aristocrats or peasants. Greece even in
Homer’s time was a commercial society, and one sees a trace of the merchant in the emplotment of Odysseus’ wanderings, “. . . and unbent sails/ There, where down cloudy
cliffs, through sheets of foam,/ Shy traffickers, the dark Iberians come;/ And on the
beach undid his corded bales.” But the character shows few townly virtues.
And even from a strictly individual point of view the bourgeois virtues, though
not those of Achilles or Jesus, are not ethical zeroes. The honesty of a society of merchants in fact goes beyond what would be strictly self-interested in a society of rats, as
one can see in that much-maligned model of the mercantile society, the small Midwestern city. A reputation for fair dealing is necessary for a roofer whose trade is limited to
a city of 50,000. One bad roof and he is ruined. A professor at the University of Iowa
refused to tell at a cocktail party the name of a roofer in Iowa City who had at first done
a bad job (he redid the job free, at his own instigation) because the roofer would be ruined in town if his name got out in this connection. The professor’s behavior itself
shows that ethical habits of selfish origin can harden into ethical convictions, the way a
child grows from fear of punishment towards servicing an internal master. A rat would
have told the name of the roofer, to improve the story. After all, the professor’s own
reputation in business was not at stake.
The motto of the Buddenbrook family was “My son, attend with zeal to thy business by day; but do none that hinders thee from thy sleep at night.”192 It is the bourgeois’ pride to be “a fair-dealing merchant,” with “quiet, tenacious industry,” to “make
concessions and show consideration.” to have “assured and elegant bearing, . . . tact
and winning manners,” a “liberal, tolerant strain,” with “sociability and ease, and . . .
remarkable power of decision at a division” in the town Assembly, “a man of action,”
making “quick decision upon the advantageous course,” “a strong and practicalminded man, with definite impulses after power and conquest,” but by no evil
means.193 “Men walked the streets proud of their irreproachable reputation as business
men.”194 Is it evil to hope that “one can be a great man, even in a small place; a Caesar
191
192
193
194
Mann, p. 200.
pp. 42, 380, 209, 320, 144, 370, 34, 400,
pp. 124, 57, 215,
p. 243.
99
even in a little commercial town on the Baltic”? What is wrong with “the dream of preserving an ancient name, an old family, an old business”?195
195
p. 215.
100
Part 2
The Bourgeois Virtues
Were Philosophized
I want to give at these Part divisions a summary of the argument each
Part to follow. I am determined to obviate the charge made against The
Bourgeois Virtues that the reader could not keep the thread of the argument in mind (and in a second edition of The Bourgeois Virtues will
insert passages like the following);
The sad history of prudence only:
The admiration for prudence in the new bourgeois society got out of hand: a
rhetoric of prudence only.
The separation of spheres was prudence-only expressed in gender relations. Implicit in Kant.
It was explicit in Bentham and philosophical radicalism.
Prudence only is not a good theory of humans, or of human society.
It was silly in Hobbes, whatever his merits in bringing it forward. Spinoza, too,
denk ik.
But regardless of how Hobbes is to be understood, the use of prudence-only in
political theory, as in Rawls and Gauthier and Buchanan, was a mistake.
It can't be fixed by adding Love, as in Nussbaum.
We need a humanistic science of economics, to apply elsewhere, as in political
theory.
This is evident in the least humanistic parts of economics nowadays. Economists
have reluctantly concluded that Max U is false. Experiments show it.
The philosophical emptiness of the pot theory of humans shows it.
Adam Smith provided it in his ethical thinking. So did the Anglican economists
of the early 19th century.
101
Chapter 10:
Adam Smith Shows Bourgeois Theory at Its Amiable Best
Smith serves as an emblem of a peculiarly 18th-century project, the
making of an ethic for a commercial society. The seen-to-be protected actual bourgeois behavior from the usual attacks by aristocracy and populism, and by government influenced by grandees
and the mob, at least until socialism ruled in 29th century.
Smith’s life was nearly as quiet as Immanuel Kant’s, though he did travel as Kant
did not at all. Dugald Stewart, his student and first biographer, was hard pressed to
give much beyond an account of the works themselves (though because Stewart was
writing in the politically troubled 1790s in Britain probably had to trim his sails).
Smith’s father died a few months before Smith was born, June 5, 1723. Smith was never
married. He was an only son, and much devoted to his mother, with whom he lived
frequently (aetat. 24-26; and aetat. 43-52 [the years 1766-75, writing The Wealth of Nations] at Kirkaldy; and 1778-1784 with her at Edinburgh until her death). Stewart notes
that Smith “enjoyed the rare satisfaction of being able to repay her affection, by every
attention that filial gratitude could dictate, during the long period of sixty years.”196
Smith and his friends exhibited a bourgeois character in the plain style of calling
each other Mr. rather than Dr. Smith.197 (Smith’s LL.D. was honorary, conferred by
Glasgow during his professorship there). Smith was inclined to “offices of secret charity,” a most bourgeois inclination.198 The Duke of Buccleuch, in whose entourage Smith
traveled the Continent 1764-66, admired him for “every private virtue,” the sort of virtue that an aristocrat would think suited to a bourgeois.199 On the 18th-century supposition, the public---that is, political---men were aristocrats. Buccleuch was responsible for
getting Smith a sinecure as Commissioner of HM Customs in Scotland in 1778 (with his
mother, in Edinburgh, where he moved from two years in London), a paradoxical position for a man opposed to protection. And yet Stewart is emphatic that Smith “was certainly not fitted to the general commerce of the world, or for the business of life.”200 He
was not bourgeois is that businesslike sense. Smith was a bookish man, and absentminded in company.
In other words, Smith was a member, of course, of the Bildungsbürgertum, the education-middle-class. He was a professor, a writer, an official of the state, the son of an
official of the state. He was no working bourgeois. His suspicions of businessmen have
Stewart, “Account,” p. 269, sec. I, 2.
Stewart, “Account,” p. 266.
198 Stewart, “Account,” p. 326
199 Stewart, “Account,” p. 307, sec. III. 16.
200 Stewart, “Account,” p. 329, sec. V. 12.
196
197
102
been made much of. But he in the end he admired them more than the alternatives.
Smith was a student at Glasgow 13-17—note the early Scottish age for university, nothing unusual: a Scottish university professor ran a prep school. He studied mathematics
and philosophy until age 24 at Balliol College. Smith contributed to the tradition of
Hobbes in mimicking mathematics. Steward: “His early taste for the Greek geometry
may be remarked in the elementary clearness and fullness, bordering sometimes upon
prolixity, with which he frequently states his political reasonings.”201 Smith 1748, aetat.
25, delivered lectures on rhetoric, his patron Lord Kames paying for him to give them.
About this time he met David Hume, and was by 1752 his fast friend.
Smith was briefly professor of logic (1751) and for a long time (13 years) of moral
philosophy (1752-1765) at Glasgow. Smith believed in the usefulness of rhetoric more
than of strict logic. Smith’s lectures as Professor of Moral Philosophy covered four subjects: theology, ethics (thus the Theory of Moral Sentiments), justice (thus the neverfinished Treatise on Jurisprudence), and expediency (The Wealth of Nations).
*
*
*
*
So Smith’s life was his work, and the work was the merely two books he published in his lifetime. (Smith would not have faired very well before a modern Promotion and Tenure Committee.)
In an early essay, which he did not carry into editions of his Essays beyond 174142, Smith’s great friend David Hume proposed a project for the age:
I shall take occasion . . . to compare the different stations in life, and to
persuade such of my readers as are placed in the middle station to be satisfied with it, as the most eligible of all others. These form the most numerous rank of men that can be supposed susceptible of philosophy; and
therefore all discourses of morality ought principally to be addressed to
them.
cite
Hume does not in fact go on to make such an address. After observing that the virtue of
friendship is natural for the bourgeoisie, which is true enough, he turns to praising artists and scholars, losing sight of his numerous audience of the middle station. His aporia (as the professors of rhetoric would say) anticipates the divide that opened in Europe
a century later between the bourgeoisie and their children of la vie bohème, and especially their sons. What is mainly striking in the essay is the unfulfilled proposal to fashion
a discourse of morality for the bourgeoisie.
Smith fulfilled what his friend Hume proposed. No aporia there. It was Smith’s
intention in all his writings published and unpublished to develop an ethic for a commercial society, a society of the middle station. Authorial intention, true, is not the
same thing as authorial accomplishment. You can intend with all energy and earnestness to write The Great American novel but the intention may, alas, be irrelevant to
reading it as it actually, sadly is. Yet Smith did accomplish his intention, though the accomplishment has often been misunderstood by his children and grandchildren among
201
Stewart, “Account,” p. 271, sec. I, 8.
103
economists, sociologists, and ethical philosophers. His temperate bourgeois rhetoric—
too bourgeois when playing against the hot rhetoric of clerks like Rousseau or Marx—
did not make his intention or accomplishment unmistakably clear.
Saying that Smith intended an ethic for a commercial age is not the same thing as
saying that he was an enthusiast for every ethical or political excess of the bourgeoisie.
Economists have often Thatcherized Smith in this way, reading into the throw-away
line about the invisible hand an entire economistic, Benthamite philosophy: “Markets
are always efficient,” say the economists, “so they provide a model for all of social life.”
Always. Sell children.
Against such vulgarity Smith wrote The Theory of Moral Sentiments (1759). In
TMS, as The Theory of Moral Sentiments is affectionately known, Smith rebuked Hobbes
and Bernard Mandeville explicitly and at length for their dependence on prudence only.
Still, prudential arguments were much in favor in mid-eighteenth-century Europe.
Therefore in The Wealth of Nations seventeen years later Smith made the argument
against the excess of bourgeois self-interest as much as he could manage in cool, selfinterested instruction, as matters of “police,” that is, policy, that is, prudence. He
warned for example that the interests of merchants and manufacturers are "always in
some respects different from, and even opposite to, that of the public."202 He therefore
did not recommend an unfettered rule of the bourgeoisie, and in fact supported the traditional politics of the landed classes.
The Wealth of Nations was read at the time as an attack more on bourgeois monopoly than on an intrusive government, as in Hugh Blair’s letter to Smith 3 April 1776:
“You have done great service to the world by overturning all the interested sophistry of
merchants, with which they have confounded the whole subject of commerce”203 The
“clamor and sophistry of merchants and manufacturers," declared Smith, "easily persuaded [the rest of society] that the private interest of a part, and a subordinate part of
the society, is the greatest interest of the whole.”204 People in pre-Benthamite Britain
saw the State as merely an instrument of the Interests, nothing like a disinterested body,
and so the more modern notion of monopoly versus the state (a notion devised in the
late 19th century by what Herbert Hovencamp has called the first law-and-economics
movement) was in 1776 a distinction without a difference.205 The idea that the Hanoverian state could be a “countervailing force” to monopoly would have struck an eighteenth-century Scot as hilarious. After all, as Smith emphasized in his book repeatedly,
the very state had created the monopolies in the first place. The bourgeois mercantilism
of which Smith complained lives still in appeals to Buy American or to protect gigantic
farms in North Dakota raising beet sugar. Wise up, said Smith in The Wealth of Nations:
get prudent. By the late eighteenth century the rhetorical ground in Europe had recently shifted. Two centuries before the first publication of The Wealth of Nations, and still
less two centuries before The Theory of Moral Sentiments, no one in England, and still less
Wealth of Nations I. xi. p. 10.
Correspondence, p. 188.
204 Wealth of Nations I. x. c. 2.
205 Cite Hovenkamp
202
203
104
in the very unbourgeois Scotland of Mary Stuart or James VI, would have thought to
write two long books treating a nation as though it were a prudent project for the selfimprovement of a bourgeois society.
And yet even the more prudence-oriented of Smith’s two books is not a book only about prudence. The Wealth of Nations waxes sympathetic for the natural right to dispose of ones labor, for example, regardless of the prudence of such a policy, and waxes
wroth against the corruptions of the commercial system. Prudence and justice, policy
and indignation, together, fuel Smith’s attack on prohibiting manufacturers from selling
at retail and farmers from selling to remote middlemen in the grain trade. "Both laws
were evident violations of natural liberty, and therefore unjust; and they were both, too,
as impolitic as they were unjust.”206
Smith was particularly indignant about restrictions on the workers’ right to use
their labor as they saw fit. The English (not Scottish) Settlement Laws, which attempted
to prevent poor people from overwhelming local relief systems, forced the poor back to
the parishes of their birth—literally, resettling them, a sort of ethnic cleansing. “To remove a man who has committed no misdemeanor from the parish where he chooses to
reside is an evident violation of natural liberty and justice. . . . There is scarce a poor
man in England of forty years of age, I will venture to say, who has not in some part of
his life felt himself most cruelly oppressed by this ill-contrived law.”207 Or again: “The
property which every man has in his own labor, as it is the original foundation of all
other property, so it is the most sacred and inviolable. The patrimony of a poor man
lies in the strength and dexterity of his hands; and to hinder him from employing this
strength and dexterity in what manner he thinks proper without injury to his neighbor,
is a plain violation of this most sacred property.”208 The word “sacred” is used by this
near deist twice in successive sentences. In view of such egalitarianism Smith has been
claimed often by the left. No wonder, in view of such passages as:
The property which every man has in his own labor, as it is the original
foundation of all other property, so it is the most sacred and inviolable.
The patrimony of a poor man lies in the strength and dexterity of his
hands; and to hinder him from employing this strength and dexterity in
what manner he thinks proper without injury to his neighbor, is a plain
violation of this most sacred property.209
Even his book on prudence, in other words, as Samuel Fleischacker has recently argued,
exhibits ethical engagement in a commercial society beyond prudence only. Justice and
temperance, with a bit of love and courage, must figure, too.
But the virtues are not heroic or saintly. Christopher Berry argues that
Whereas the premodern view sees a threat to virtue and liberty in the
boundless uncontrollability of human bodily desires, modern, Smithian
liberalism accommodates those desires. Virtue is largely domesticated or
privatized. . . . Understood in this manner neither virtue nor liberty calls
206
cite
Smith, , Bk. IV, Chp. 5, para. 55
Smith, Wealth of Nations, Bk. I, Chp. 10, para. 118.
Smith, Wealth of Nations, Bk. I, Chp. 10, para. 67.
207
208
209
105
for superhuman qualities but are tasks which every human partakes and
for which every human is qualified. . . . [T]hey are less exclusive than the
classical versions, which are, in comparison, elitist and sexist.
Berry 1992, p. 84.
This is how social teleology is brought into the virtues. The virtues are those of Hume’s
middling sort, not titanic heroisms. An economy and polity of middling people with
middling virtues will suffice.
Of the seven virtues of classical and Christian theory, Adam Smith paid particular attention to three. His three books—well, two published and one intended—match
the three: prudence is the chief if nothing like the only virtue considered in The Wealth of
Nations; temperance is the chief if again certainly not the only virtue considered in The
Theory of Moral Sentiments; and justice was to be considered in a projected Treatise on Jurisprudence, which we can read from elaborate notes by Smith's students in a course given from his chair of Moral Philosophy in 1762-63 and 1766. Smith was using a compendious model of social behavior something like this:
106
The Platonic/Smithian Social Model
Animal passions, pleasures,
utilities, impulses, desires
eros, bia
Characteristically human
faculties of reason and of speech
peitho, mythos, logos
may be regulated by one of three alternative channels:
balance of power,
Prudence
Wealth of Nations
Exit
precedent, habit, law, viz.
Justice
Treatise on Jurisprudence
Voice
personal virtues, governed by
Temperance
Theory of Moral Sentiments
Loyalty
which lead to
good behavior of people or of governments
As also in Aristotle and Kant, the Smithian is distinguished from the early-Hume /lateBentham/modern-economist model by the presence, of a second motivating force, beyond animal passions. As within a single person, so within a polis, as Plato had argued
at length. There are no other ways than the three virtues of prudence, justice, and temperance, it is claimed, that passions may be translated satisfactorily into behavior.
Albert Hirschman has famously characterized a similar choice as "exit, voice, and
loyalty." If you dislike the latest proposal for an optional war for oil you can take three
routes. You can exit the political community, washing your hands of the matter, moving to Canada. Or you can exercise your voice before the courthouse and in the newspaper and at the polls to change the policy. Or you can retreat to the quietism of personal virtue, tempering your dislike, seeing the point in the policy, staying loyal to the
polis. The fit with Hirschman's categories is not exact, but the Platonic-Smithian model
here is of the same genre at least, and makes the same point. It is: that exit, or prudence,
is not the only option that social science should consider in controlling passions.
And indeed, passions are not the only motivators of humans— unlike dogs, humans are open to reason and rhetoric.210 If not, it would have been pointless for Smith
to write at length about the idiocies of mercantilism or empire, or Hirschman in his
youth to write on policy for Latin America. The balance of power is not the only constraint on human passions. "Realism" in foreign policy asks that we think only of passions and only in prudential terms. Be tough, it recommends, and "realistic." But it ignores the habits and laws of nations, a civic republicanism which can justify good behavior. And it treats with contempt the ethical channel, and, worse, the rhetorical
channel, calling it "preaching." Thus George Stigler, the Chicago economist, an enthusiastic advocate of so-called “rational” models of politics, opposed always the premise of
210
Hursthouse 1999, pp. 102-03, 107, 111.
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his friend and colleague Milton Friedman, that people are open to reason, and that reasons therefore are worth giving.
Vivienne Brown notes in her book of 1994, Adam Smith’s Discourse, that the talk of
ethics in The Wealth of Nations is directed at the butcher and the baker and the politician
in the ordinary business of their lives. Smith’s talk there is of a “lower-order” ethics,
she says, a matter of prudence rather than of great-souled practice of balanced virtues
recommended in The Theory of Moral Sentiments.
But is Smith’s discourse of morality ever really about lower order, prudenceonly? His standard for the middle station is better shown than told, as in his first appearance in print, an unsigned memorial to a bourgeois friend, in 1758, while (age 35)
he was completing The Theory of Moral Sentiments:
To the Memory of Mr. William Crauford,
Merchant of Glasgow
Who to that exact frugality, that downright probity and plainness of
manners so suitable to his profession, joined a love of learning, . . an
openness of hand and a generosity of heart, . .. and a magnanimity that
could support . . . the most torturing pains of body with an unalterable
cheerfulness of temper, and without once interrupting, even to his last
hour, the most manly and the most vigorous activity in a vast variety of
business. . . . candid and penetrating, circumspect and sincere.
citation
This is not an encomium to Profit Regardless, or I’ve Got Mine, Jack. It praises the
bourgeois virtues. And “bourgeois virtues,” it suggests, is no oxymoron.
Glasgow in the 1750s and 1760s was a suitable place to launch a free-trade theory, says Stewart, and Smith was much acquainted with businessmen there.211 Smith
recognized the prudent and just desirability of developing an ethic for a commercial age
beyond the Me-First ethic of mercantilism or of the country club; and beyond traditional
Christianity (though Smith, as a virtue ethicist, has a lot of Aquinas in him); and beyond
classical stoicism. His writings are hard to imagine outside of the eighteenth century in
the commercial quarter of Northwestern Europe---though there are eerie parallels in
Japanese thought at the time. Smith shared with Kant a deism that raised the question
of how to live a good life without God actively present. Both men answered, By Reason. But Kant’s reason was a Platonic, absolute one, a closed aristocracy of proof.
Vivienne Brown has noted that Smith’s reasoning about ethics was on the contrary dialogic and open. And I would add that his ethics were empirical, depending on a philosophical anthropology or psychology that Kant scorned. Smith’s, you could say, was
Aristotelian and Aquinian rather than Platonic, interested in how sacred and profane
interact among actual denizens of this world as against Ideal Rational beings.
Smith for example was obsessed as Kant was not with how language and its limits fits a society of merchants as against the older absolutes of saint or hero. Smith was a
rhetorical theorist, explicitly and self-consciously. The notion that ethical behavior
should come out of an internal dialogue with a better self, named by Smith the Impar211
Stewart, “Account,” p. 300
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tial Spectator, is natural to someone who believed that language was foundational.
Smith’s first job was teaching rhetoric to Scottish boys. He was we would say a highschool teacher of English. By contrast Kant (though like Smith a famously good university lecturer) believed that a priestly and individual Reason was foundational. Manfred
Kuehn’s recent biography argues that Kant modeled himself on an English merchant
very like the Scottish one Smith memorialized. But Immanuel was no theorist of the
chattering bourgeoisie. Adam was. Walk with me, talk with me; what news on the Rialto?
Smith and the rest of the economists and calculators 1700 to 1848 were of course
busy providing a theory of innocent contributions to the well-being of the world arising
from the genius of the natural merchant. They explained how the cooperation and
competition of people getting money leads to the division of labor and the wealth of nations. Smith was not appalled that in places like Holland or Scotland or England or
Pennsylvania people got money. A quarter century before Napoleon’s sneer at the nation of shopkeepers Smith noted that “England, though in the present times it breeds
men of great professional abilities in all different ways, great lawyers, great watch makers and clockmakers, etc., etc., seems to breed neither statesmen nor generals.” Smith
was not criticizing the bourgeoisie in saying so (though he was criticizing Lord North
and his American policy), any more than Hume was when he wrote that “There are
more natural parts, and a stronger genius requisite to make a good lawyer or physician,
than to make a great monarch.”
Yet Smith is concerned to avoid an ethics of what the market can bear, the worst
of bourgeois other-directedness. Smith encompasses the paradox that a conscience, his
Impartial Spectator, has a social origin yet can stand against society. “When we first
come into the world,” he writes, “we are accustomed to consider what behavior is likely
to be agreeable to every person we converse with, to our parents, to our masters, to our
companions.” So an adolescent. Yet a mature person abandons “the impossible and
absurd project of rendering ourselves universally agreeable.” “The weak, the vain and
the frivolous, indeed, may be mortified by the most groundless censure or elated by the
most absurd applause. Such persons are not accustomed to consult the judge within.”
The man o’ independent mind,/ He looks and laughs at a’ that.
Likewise St. Thomas spoke of a faculty of “synteresis” (Greek “watching closely”; the scholastics for some reason spelled it “synderesis”), the conscience, a third thing
beyond nurture or nature, beyond upbringing or original sin—we call original sin nowadays “genes,” and congratulate ourselves for our lack of theology. Synteresis or the
germ of an Impartial Spectator resolves the nature/nurture paradox with free will. An
ignorant woman can by her good will be more virtuous than many a proud doctor. A
virtuous pagan, in some theologies emphasizing free will, can enter Paradise. It is similar to the way the brain is supposed to work in modern theories, begun by biology but
then self-healing, self-directing, self-educating. Thus blind people train their visual cortexes for substitute uses. Smith and St. Thomas take the sunny view that we can bend
our will to virtue and can self-heal—this in contrast to the pessimistic line of St. Paul, St.
Augustine, and John Calvin, in which we are sinners lacking grace in the hands of an
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angry God. “Grace,” says Aquinas to the contrary, “does not dispense with nature; it
perfects it.”
Smith, then, is less a neo-stoic, as he has often been called, than he is a secular
Aquinian. For stoicism is above all anti-bourgeois. Its founder Zeno is an early example of a character in bourgeois culture, the anti-bourgeois son—Zeno’s father appears to
have been a Cypriot merchant. Zeno’s follower Epictetus advised: “Wish [events] to
happen as they do happen; and you will go on well.” It is the opposite of bourgeois’
busyness. “Whoever then would be free, let him wish nothing,” Epictetus declares.
“For this is your business, to act well the character assigned to you; to choose it, is another’s.” The Enchiridion begins, “Of things, some are in our power, and some are not.
In our power are opinion, pursuit, desire, aversion, and in one word, whatever are our
own actions. Not in our power, are body, property, reputation, command, and, in one
word, whatever are not our own actions.”212 Epictetus recommends that we deal only
with those things “in our power,” as he claims them to be. But his list of things not in
our power is precisely the list of things the bourgeois reckons are in his power: body,
property, reputation, command. Epictetus articulates the ethic of an emperor or a slave,
aristocrat or Christian. You have a heroic character or an immortal soul, given to you
by the grace of the gods, or of God. Do well with your gift, but don’t expect much. In
aristocratic and peasant theory you do not make yourself and cannot advance in condition. Thus the so-called Law of Jante in Denmark, a peasant sensibility (it comes from a
comic novel of the 1930s): do not think you are better than other people. No free will;
grace alone (these were Lutheran bachelor farmers, after all). What matters is your
moral luck, your genes, your original sin, your fate, fatō profugus.
Smith’s ethical theory, furthermore, is social. It does not recommend bowling
alone. Again Vivienne Brown has it right. She discusses in detail the influence of an
aristocratic-pagan or peasant-Christian stoicism in Smith’s thought but sees clearly that
he is proposing something beyond stoicism. Stoicism is solipsistic. Smith’s dilemma
was how to be inner-directed yet properly social, a good person though living in town.
Metaphors of accounting were part of bourgeois education and had long been the metaphor of Protestant self-education, as in Robinson Crusoe’s thoughts on the island.
Smith wrote in his letter to Gilbert Elliot some months after the first publication of The
Theory of Moral Sentiments, “Man is considered as a moral, because he is regarded as an
accountable being. But an accountable being, as the word expresses, is a being that
must give an account of its actions to some other, and that, consequently, must regulate
them according to the good liking of this other.” Though the accountable being “is, no
doubt, principally accountable to God [says Smith with his mild faith so far from the
quarrelsome Calvinism of Scotland a century before], in the order of time, he must necessarily conceive of himself as accountable to his fellow creatures.” The Impartial Spectator of the good person’s imagination is a “Substitute for the Deity.”
And then he makes a sweet argument why “the author of nature has made man
the immediate judge of mankind”: “If those infinite rewards and punishments. . . were
212
cite
110
perceived as distinctly as we foresee the frivolous and temporary retaliations which we
may expect from one another, the weakness of human nature, astonished at the immensity of objects too little fitted to its comprehension, could no longer attend to the little
affairs of this world; and it is absolutely impossible that the business of society could
have been carried on.” It is a deistic and bourgeois thought: that business should take
precedence over salvation, lest we starve praying on a pillar in the desert, and that
therefore God in His wisdom has arranged moral sentiments to make the little affairs of
the world more convenient.
I have referred to Vivienne Brown’s book as though she would approve my
theme here. She would not. She and I agree that Smith is first and last an ethical philosopher, a view which is becoming stronger as philosophers like Samuel Fleischacker
pick up Smith. We agree that within bourgeois economics Smith has been read erroneously, as a confused precursor of later economic theorists of the self-governing character of markets, such as Émil Walras and F. Y. Edgeworth and Kenneth Arrow. We also
agree that reading Smith is a rhetorical task not to be reduced solely to his intentions or
his logic. Brown perhaps relies too exclusively on her claims about the monologic character of The Wealth of Nations as against the supposed dialogism à la Bakhtin of The Theory of Moral Sentiments (which therefore, she says, “bears the signs of the moral fragmentation of humanity”). But considering the over-free use of Smith’s Intentions in the existing literature on Smith, one can understand why she appeals to a New-Critical horror
of the Intentional Fallacy as something like a shibboleth: all intentionally is to be banished, and The Text is to stand alone.
And yet Smith’s life was a text, to be interpreted, and a life as methodical as
Smith’s often has illuminating intentions.
Brown has persuaded me that Smith’s affection for agriculture, though an analytic error, is not something that can be ignored in reading his ethics. Smith and his followers up to John Stuart Mill did not grasp the scale of modern economic growth, the
factor of 15 or 20 or so by which our material lives exceed that of our eighteenth-century
ancestors. That Smith could view manufacturing as something of a luxury is part of the
misapprehension. And yet in praising agriculture he is praising what he regarded as
prudent investment, not the traditional social relations of the countryside. His agriculture was Lowland commerce in grain, not Highland cattle herding. He is again busy in
a bourgeois project.
Where Brown and I most sharply disagree is precisely in my claim that Smith
expressed a commercial morality. On the contrary, she writes, “the texts of TMS and
WN contain instances. . . where concern is expressed over the impoverishing effects of
commercial society in eroding standards of public decency as well as private morality.”213 True. But I would claim that such concern is what one would expect in a serious
project of bourgeois ethics. Smith after all devotes more space to the enriching effects of
commercial society---and not in bread alone, but in converse and address, the doux
commerce of French pro-bourgeois theorists at the time. As Tom Paine wrote, commerce
213
cite
111
operates to “cordialize mankind.” Brown says flatly that The Wealth of Nations “cannot
be read as an endorsement of ‘liberal capitalism’.” I believe it can, at least when read
against the illiberal texts in opposition—the pamphlets and begging letters of the mercantilists, for example.
True, true: Smith is not simply Milton Friedman in knee britches or Margaret
Thatcher in drag. But as Brown herself puts it, Smith and other Scots were showing
how “a society may cohere and its people may live decently, in spite of the moral failure
[by the highest, and utterly asocial, stoic standards] of mankind at large.” The idea was
characteristic of the Scottish Enlightenment—not utopian, those mad attempts to refashion human nature, but a program of living decently together within the constraints of
anthropological and psychological facts. Brown does not acknowledge how very bourgeois such an ethical project was. She concludes, “It is a mistake, therefore, to think that
in commending prudence as a lower-order virtue [I would again dispute the `lower order’], is praising either economic activity in general or the economic activities associated
with what later became known as the middle class.” Scrutiny of the argument surrounding her assertion does not justify her word “therefore.” She does not tell why the
inventor of economics cannot be read in all his works as praising economic activity--with reservations, as a moralist for the age, but nonetheless praising in a way that
would have been possible at only a few other times and places outside Scotland in its
Enlightenment.
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Chapter 11:
Franklin Was Bourgeois, But Not Prudence-Only
Footnotes to be added to this from another version:
For various reasons, anyway, such an ethic was a natural project in the 18th century for a Scottish Enlightenment, or indeed for an even more marginal American Enlightenment, as can be seen in a figure like Benjamin Franklin. Both locales, like Holland earlier, were laird-light, and were commercial without being wholly ignorant of
philosophy. The theory of the bourgeoisie came from the margins, away from courts
and princes. It is emblematic of the mechanism involved that Voltaire, that friend of
kings and their mistresses, was driven in 1726 to reflect on British commercial virtue
precisely by his banishment from Paris and its courtly environs, a banishment occasioned by an insult to a well-connected aristocrat. His estate in far Verney, nearly in
Switzerland, purchased with his profits as a grasping speculator early and late, not the
central places of Versailles or Paris, would be where he preached the bourgeois virtue of
cultivating ones own garden.
Franklin shows the ethic flourishing on the furthest margins. W. H. Auden said
in 1940,
Out of the noise and horror, the
Opinions of artillery. . . /
. . . the smell
Of poor opponents roasting, out
Of LUTHER’S faith and MONTAIGNE’S doubt,
...
Emerged a new Anthropos, an
Empiric, Economic Man,
The urban, prudent, and inventive,
Profit his rational incentive
And Work his whole exercitus,
The individual let loose
To guard himself, at liberty
To starve or be forgotten, free
To feel in splendid isolation
Or drive himself about creation
In the closed cab of Occupation.
W. H. Auden, “New Year Letter (January 1, 1940),”
Part Three, p. 184
In far Philadelphia Benjamin Franklin lived a bourgeois life on which Auden
looked back with amusement, and which Smith would have praised. A century ago
Max Weber made the point by using the Franklin of the Autobiography as the very type
of secularized Calvinist, embodying the spirit of capitalism. About the same time D. H.
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Lawrence thought he recognized in Franklin what he hated most, the man of bourgeois
society, “the sharp little man. . . . The pattern American, this dry, moral, utilitarian little democrat.” “Dry.” Well. It might be said that Lawrence, possessed of a worse sense
of humor even than many others of his fellow modernists in literature, was not well
equipped to read Franklin. Fifty years earlier Charles Baudelaire (who cannot be accused of lacking a sense of humor) had assailed Franklin as “the inventor of the ethics
of the shop-counter, the hero of an age dedicated to materialism.” That’s wrong and
right at the same time.
Franklin was to be sure a successful businessman. But Work was not his whole
practice, and he did not in fact drive about creation/ In the closed cab of Occupation.
Lawrence is only one of the numerous British mis-underestimators of Franklin: consider
Auden as quoted; and surprisingly Alasdair MacIntyre, who has spent most of his career in the United States yet nonetheless relies on Lawrence’s anti-bourgeois and antiAmerican reading of the Autobiography. Baudelaire had asserted that “civilized man
finds himself confined within the narrow limits of his specialty . . . . [and] has invented
the doctrine of Progress to console himself for his surrender and decay; while primitive
man, a feared and respected husband, a warrior obliged to personal valor, . . . comes
closer to the fringes of the Ideal.” I think not, and neither did Benjamin Franklin.
Franklin was a great, indeed after age 42 a full-time, negotiator and projector for
public purposes unrelated to business ambition, though learning early to “put myself as
much as I could out of sight.” He explains the tactic prudentially, as men did in those
first days of a Godless world: “The present little sacrifice of your vanity will afterwards
be amply repaid.” That he uses such prudential rhetoric of cost and benefit does not
mean he was in fact the monster of prudence-only that Baudelaire and Lawrence imagined. For projecting paving, street lighting, the lending library, the hospital, the university, the fire department, and a self-improving discussion group for Philadelphia, a private postal service, the American Philosophical Society, and the American Foreign Service for the colonies and the new nation, and bifocals, lightning rods, bourgeois virtues,
and the theory of electricity for the world at large he says he was amply “repaid.” But
in what coin? Honor; good repute; the good of his community—motives that a warrior
obliged to personal honor would recognize.
The metaphor of being “repaid” for a present sacrifice as though a loan at interest typifies Franklin’s businesslike manner of theorizing, and has misled anti-business
readers of his Autobiography. Character in his theory—but not, I am claiming, in his actual behavior—is a capital project, to be built at present sacrifice for future repayment.
The theory was a commonplace. It suffered after 1848 from assaults by socialists and,
later, Freudians who had other notions of what made character, such as ownership of
the means of production or a grasp of the reality principle. Crusoe enlarged his spiritual capital stock. Franklin recommends building good character on personal prudential
grounds, as Smith recommends the free disposition of capital and labor on social prudential grounds (though usually accompanied I have noted by a Scots rant on the dignity of freedom for its own sake, a rant less necessary in Pennsylvania). “I had therefore a
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tolerable character to begin the world with,” Franklin writes, “I valued it properly, and
determined to preserve it” as he preserved the capital in his printing business.
Even in Franklin’s misleading rhetoric a successful bourgeois does not rely entirely on prudence. It shows in the tension between a short- and long-run prudence.
Franklin speaks of his friend William Coleman, “then a merchant’s clerk, about my age,
who had the coolest clearest head, the best heart, and the exactest morals, of almost any
man I ever met with. He became afterwards a merchant of great note, and one of our
provincial judges.” Do well by doing good. The tests Franklin here applies would be
agreeable to Smith’s Impartial Spectator or his encomium to the Merchant of Glasgow:
beyond mere short-run worldly success but not inconsistent with it, either.
His book of 1771 counsels his son, soon to be alienated by his father’s antimonarchic politics. The book was not finished until much later and was first published
only in 18NN. It has had since then fully 400 editions.214 Franklin—like Smith in his
book of 1776 counseling the nation—speaks of prudence more than he speaks of love,
esteem, or solidarity. If you ignore Franklin’s actions, and his other writings, as economists have ignored The Theory of Moral Sentiments, you might infer that only prudence
mattered. Certainly Lawrence drew such an inference.
The prudence-only reading is not of course entirely unjustified by the text.
Franklin for example always gives a prudential excuse for goodwill, as though he expected his readers to be cynical about earnest claims of love. “These friends were afterwards of great use to me, as I occasionally was to some of them.” It took Romance
and evangelicalism among the intelligentsia of Europe to bring love back into repute.
But a manly self-regard in Franklin’s circle is in fact hedged by it. Franklin in his youth
was much impressed by the cynicism of Mandeville’s claim that vice was just as good
as virtue for keeping society prosperous. But he abandoned such views after a larger
experience of life. The friends whom he claims in the Autobiography to be merely useful
“continued their regard for me as long as they lived.” Such constancy bespeaks not a
friendship of interest or amusement, which in Franklin’s rhetoric is easiest to justify, but
Aristotle’s third and highest friendship, for the friend’s own sake, which plays no official part in his rhetoric. Of a spendthrift friend he says, “He owed me about 27 pounds,
. . . a great sum out of my small earnings [above the average annual income at the time,
to give an idea of the great size of the debt: think of $50,000 nowadays]. I loved him
notwithstanding, for he had many amiable qualities.” Almost for his own sake. But
Franklin cannot in 1771, standing a little to the side of an explicitly Christian framework
for ethics, quite admit that he simply loved the rogue. He claims instead that after all
his friend was amusing.
Again, in urging other printers (in Franklin’s day, of course, virtually publishers)
to keep their presses clear of libel and personal abuse he ends as usual with an argument from narrow prudence: the printers “may see by my example, that such a course
214
p. 246 Huang, Nian-Sheng. 1998. "Franklin, Benjamin." Pp. 24-246 in R. W. Fox and J. T. Kloppenberg, eds., A Companion to American Thought. Oxford and Malden: Blackwell.
115
of conduct will not on the whole be injurious to their interests.” Yet Franklin’s discourse here as elsewhere is seldom wholly prudential, no more than Smith’s was. Like
Smith thundering at violations of natural right when freedom of employment or of investment is blocked, Franklin thunders at printers filling their newspapers with private
altercations, which “pollute their presses and disgrace their profession.” This is not the
discourse of a consistent Benthamite, cool, without moralizing, intent on prudence
without appeals to justice or love.
Still, as I have argued, Smith and Franklin do put their ethical talk in businesslike
terms likely to appeal to eighteenth-century men before the Sentimental Revolution.
Franklin like Smith claims to care more for the consequences of ethical behavior than for
its purity of intention. A pure intention is secular grace, much valued by Kant and ethicists following in his train. Good will would, said Kant, “sparkle like a jewel in its own
right, as something that has its full worth in itself. Usefulness or fruitlessness can neither diminish nor augment this worth.” A good will is unwarranted by works, a free
gift of God, suited to religions of the messiah from Christianity to environmentalism
and the animal rights movement. However bad the unintended consequences in this
world, a pure soul and good intentions promise a reward in another world, if only an
imagined world of Duty.
Franklin and Smith would agree with Kant only at the level of Sunday preaching
(which they did not disdain, though not rigorous in attendance). What matters on
Monday (as the Dutch economist Arjo Klamer puts it) is the Impartial Spectator shaping
a good character for future use. Or indeed (to think prudentially but in the short run)
what matters for business from Monday to Saturday is the Spectator, impartial or not.
Franklin scandalizes a Christian of his own time, or a secular but ethically serious humanist of our own time, in making his famous little joke about his pride: “I added humility to my list [of virtues to be cultivated when he was a young man]. . . . I cannot
boast of much success in acquiring the reality of this virtue; but I had a good deal with
regard to the appearance of it” (Claude-Anne Lopez remarked once that Franklin will
lack a full biography until someone with a sense of humor attempts it).
Sincerity, that virtue most admired by Romantics, does not figure much in Franklin, or in Smith. True, the seventh of Franklin’s thirteen virtues to guide daily life is exactly “Sincerity,” but he gives it a narrow and pre-Romantic range: “Use no hurtful deceit. Think innocently and justly; and, if you speak, speak accordingly.” This is not the
sincerity of Goethe or Shelley, the hero unburdening his soul. It is not Lawrences’
“Sincerity,” written explicitly in parallel with Franklin’s by a late Romantic antibourgeois: “Remember that I am I, and that the other man is not me.” Franklin’s sincerity is “honesty,” again defended as prudential and social: “I grew convinced that truth,
sincerity and integrity in dealings between man and man, were of the utmost importance
to the felicity of life.”
Franklin’s list of virtues does not reflect all the bourgeois virtues he records in
the rest of the Autobiography, or for which he was known to the world. Perhaps the list
was trimmed in piety towards conventional Christianity. But for whatever reason it
misses a good deal of Franklin the bourgeois---not all, for the virtues numbered 2
116
through 6 out of the 13 are those of an actor in the marketplace, and mainly irrelevant to
virtue in a pagan or Christian mode: “Speak not but what may benefit others or yourself”; “Let each Part of your Business have its Time”; “Resolve to perform what you
Ought”; “Waste nothing”; “Lose no time.” The bourgeois part of the list drives Lawrence, a maker of the new aristocracy of literary modernism, to angry distraction. At
virtue number 7, that Sincerity, though, Franklin’s list loses its bourgeois cast, ending
with “Humility: Imitate Jesus and Socrates,” which Franklin admits was a later addition. The list is deistic, not Christian. Nor is it stoic, though Franklin modeled himself
on Cicero in some ways, excepting Cicero's unrestrained habit of making jokes at other
people's expense. Nothing in it corresponds to the three theological virtues, and only
justice and temperance of the four pagan virtues.
Among the missing in Franklin’s explicit list of virtues are the bourgeois versions
of prudence and courage: commercial prudence and commercial enterprise. Franklin
exhibited these to an unusual degree. It is the point of his book to recommend them to
young men who wish to become like him “honest instruments for the management of . .
. affairs.” As a boy, he said, “I was generally a leader” and had “an early projecting
public spirit.” Defoe’s Essay on Projects, he writes, was an early influence. He became
the best printer in the colonies (he modestly implies) and a man of wealth not by following Christian or aristocratic virtues but by following the bourgeois virtues recommended in---surprise---the Old Testament. He quotes Solomon on virtue’s reward in this
world: “Length of days is in her right hand, and in her left hand riches and honors”;
and quotes Solomon on the “calling,” the very passage that Weber most emphasized,
“Seest thou a man diligent in his calling: he shall stand before kings.” Franklin the
printer had in his life precisely the satisfaction of recalling days of riches and honors, an
American businessman standing literally before kings.
Another bourgeois virtue which Franklin omits from his list, though he (and
Smith) practiced it famously, was amiability. By his own account, he made friends-foruse-and-amusement with astonishing ease: “The Governor, seeming to like my company [though Franklin was at the time a mere teenager], had me frequently to his house”;
“I had shown [to a Quaker woman on the boat to Philadelphia as a boy] an obliging
readiness to do some little services which impressed her I suppose with a degree of
good-will towards me.” Again he is spinning the events as prudent, but obviously he
was more than that. Franklin’s is not a Hobbesian world of defectors in a Prisoner’s Dilemma, as intellectuals in ignorance of business practices have imagined the world of
business to be, but a world that presumes until supplied definite evidence to the contrary that we are willing to cooperate. (The economist and historian Alexander Field has
written a fine book on the theme, arguing that such a premise of cooperation is in fact
hard-wired into humans.)
Franklin marshaled cooperation all his life, and was in this an ideal bourgeois.
Cooperation, not competition, is the life of capitalism. The intellectuals of course take
amiability, especially in its American version, simply as a false rhetoric, the little con.
They believe, and often practice in their own lives, a rule of harshness in business, their
own business as scholars and teachers and book reviewers, but also their economic
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business, when they venture into the agora. It’s just business: that’s why I, the professor, happily free from the corruptions of the marketplace, feel justified in my own business in being cruel and ruthless and lacking in good humor. The highest value is being
tough---again, the quasi-aristocratic turn is especially an obsession of American men
and their female imitators, and especially American academic men in the train of early20th-century gender anxieties. An actual life in business must on the contrary be filled
with humor, and must be highly selective with cruelty. Business life is not solitary,
poor, nasty, brutish, and short. Or else, Franklin would say when bowing to the new
religion of prudence, it’s not good business.
And still another and central bourgeois virtue of Franklin was address rhetoric.
Franklin was a great persuader in private business or in the salons and coffee houses of
Paris and London, though he was not an aristocratic orator (he and Washington were
well known for their taciturnity in public assemblies, and for the corresponding weight
of their words when they did speak). Here too his life followed Smithian lines, the
Smith who placed the faculty of speech along with that of reason at the origins of the
propensity to truck and barter.
The theorizing of a bourgeois life was taking place in America and Scotland,
even Naples, rather than in Paris or London (where the Best Theorists more usually
held court). It would otherwise seem strange that sociology, economics, jurisprudence
(and while we’re at it, geology, among the physical science—not the aristocratic physics
or astronomy) were first expressed in English by Scots. Hutcheson, Hume, Smith, Ferguson, the law Lord Kames (Henry Home) were hardly country bumpkins unaware of
preference and privilege. Smith, the son of a revenue officer, was himself from 1778 a
royal appointee collecting the import taxes he had lately deprecated. He had spent six
years, though not happily, at Oxford. He was tutor for many years to the Duke of
Buccleugh’s son on the young man’s long Grand Tour. He was fluent in the rhetoric of
Your Lordship’s most obliging and most humble servant, Adam Smith. Yet Smith and
his teachers and friends were not of the Court party and were not surrounded by a
world of grandees. Their daily acquaintances were businessmen and lawyers, and very
few territorial lords. They were not fashionable people. One could hardly be so in Edinburgh, not to speak of Glasgow or Philadelphia. Smith writes: “Are you in earnest
resolved never to barter your liberty for the lordly servitude of a court, but to live free,
fearless, and independent? There seems to be one way. . . and perhaps but one. Never
enter the place.” It was of course ancient advice. Juvenal spoofed the “aged, genial
Crispius” ---compare Shakespeare’s Polonius---as the perfect courtier, “not a citizen able
/ to speak his mind freely, and stake his life upon the truth./ Therefore Crispius saw
many summers, and his eightieth / Solstice, by such weapons safe even in that lofty
hall.”
Bourgeois, Lowland Scotland or bourgeois, tiny Philadelphia, not the great cosmopolis, was the place of these anti-Crispiuses of the eighteenth century, despite flirtations abroad: “Tho I am happy here,” wrote Smith to Andrew Millar from Paris in 1766,
“I long passionately to rejoin my old friends. . . . Recommend the same sober way of
thinking to Hume. He is light-headed, tell him, when he talks of coming to spend the
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remainder of his days here [in Paris].” From London a few years before Hume had
claimed that “Scotland suits my fortune best, and is the seat of my principal friendships;
but it is too narrow a place for me.” Perhaps it was too narrow for Hume, but not for a
man who was actually carrying out a theory of the Middle Station, ethical and economic.
Smith was of course just as aware as Hume was of the inconsequence of Scotland
beside England and France: “For though learning is cultivated in some degree in almost
every part of Europe,” he wrote in the first and failed attempt at an Edinburgh Review
(1755-56), “it is in France and England only that it is cultivated with such success or
reputation as to excite the attention of foreign nations.” But is was on just such a margin that one could take seriously the ordinary business of life. As Arthur Herman puts
it, “Scottish merchants and capitalists, like their American counterparts, recognized the
advantages of a laissez-faire private sector far earlier than the English or the other Europeans” (though I think Herman does not realize that Holland was the pioneer; he
should write a book about it). It was never at the court of the Great King that bourgeois
theory could develop: it could develop at commercial Athens not Persepolis; at commercial Florence and Venice, not at Rome or Constantinople; at commercial Amsterdam
and Edinburgh, not at Versailles or Westminster or even at The Hague.
The least aristocratic places, more admiring of the middle station, are the Second
Cities. They’re not always many miles from the cosmopoloi, but they feel it. Think of the
aristocratic air among the clerisies of New York or Washington compared to the big
shoulders of Chicago, or among the artists of modern Amsterdam compared to the
rolled-up sleeves of Rotterdam, among the proud bureaucrats of Rome and Madrid
against the business people full of saggezza/seny in Milan and Barcelona. The claim is
that in such places, away from every pretense of firstness, aristeia, by traditional standards, away from Court or private gallery, the bourgeoisie could theorize in confidence
about itself.
The theory thus birthed was one of practical improvement short of utopia, by
contrast to the mischievous religious-socialist/apocalyptic-revolutionary view and all
our woe. Militant utopian Christianity was the catastrophe of seventeenth-century Europe as militant utopian post-Christianity has been the catastrophe of our times. The
bourgeois wants neither—merely improvement, cultivating ones own garden in accord
with Dr. Pangloss’ chastening precept and Dr. Johnson’s Tory pragmatism and Dr.
Smith’s theory and Dr. Franklin’s life.
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Chapter 12:
Bourgeois Theorizing was in Fashion
Another scrappy chapter. Its problem is that I do
not understand why bourgeois virtues came to
dominate. I offer here some early and disconnected thoughts:
What was odd was precisely the philosophizing of bourgeois virtues, including its
representation in literature, such as in the novel---with its focus on individual ethical
development as against picaresque adventures in a haunted world of an unchanging
hero, Odysseus to Quixote. Bourgeois virtues were becoming the ideology of the age.
True, Romanticism reversed it, elevating heroic and saintly virtues in imagination just
as they were disappearing in fact. But that is another story.
What is special about the German Ocean is the development there of bourgeois
rhetoric. When exactly did the turn happen? The philosophizing of a bourgeois-dominated economy was essential to its protection, and anyway indicated how
deeply embourgeoisfication had penetrated. If even the scribblers find merit in markets, you can be sure that a good swathe of other people do. I’ve mentioned the protection of urban trade that some medieval theologians began to offer. But an articulated
defense of capitalism awaited the 18th century in Europe.
There were earlier straws in the wind. Here the Spanish theorists: use
Schumpeter The humanist lawyer, Konrad Peutinger (1465-1547), son of a distinguished family of Augsburg merchants, defended in 1530 the family of Fuggers—one
was so rich that he was known simply as "Jacob the Rich"—against the regulatory fervor
of the Nurenberg town council. In Jacob Viner's paraphrase of his long brief Peutinger
argued that:
Every man, be he priest or laic, prince, gentleman, or burgher,
wholesale or retail merchant, peasant or whatever else, has the
right to seek his enrichment in an honorable way, to manage his
estate so to make it yield income, and in general to pursue his own
self-interest, especially as it serves also the common good that a
land should have rich inhabitants.
Viner 1959, p. 60
Sounds good. But this was a legal brief, an argument for the time and place, not a declaration of laissez faire on a philosophical level. "The common good" turned out to be
the good of the Holy Roman Emperor in Vienna, to whom the brief was addressed. As
Mary Catherine Welborn noted in 1939, "In his appeal to the emperor on behalf of these
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merchants, Peutinger cleverly pointed out how generous those capitalists could and
would be to the ruler who protected them."215 It was precisely the mobility of the Fuggers within a Middle Europe fragmented into hundreds of political pieces that protected them. Less so their descendants in 1939, after Peutinger's steady advocacy of the
large nation state in Germany and Italy had succeeded. Many historians have argued
that the fragmentation of early modern Europe, what Robert Dahl called “polyarchy,”
made for liberty—as against the medieval notion of a "freedom" consisting of special
rights for special people, e.g. the wandering merchants with their own courts of law, the
subjects of this or that lord wherever they may be, or the guilds and town council of
Nurenberg.
The theorizing I say is crucial. Markets and capitalism could flourish without
any resulting change in the governing theory. A privileged Communist Party still runs
China. That businesspeople are making cloth and profits does not automatically lead to
an honoring of their lives, or a shift of political power. You can watch a long, long lag
of honor behind accomplishment in Europe, as in the very the gradual shift of the word
"gentleman" in English from "a properly idle landowner entitled to carry and use a
sword" to "a polite and sweet-tempered fellow, probably a businessman." By the 1760s
it is “him, who merits this denomination: the Man elevated above the vulgar and distinguished either by his superior accomplishments or by his high birth and dignity of
station.”216 The OED does not even in the Supplement of 1933 admit the democratic use
except as "contemptuous or humorous." The difference between England and America
then is seen in sense 2 in the second Merriam-Webster's unabridged (1934), "a man of
refined manners" or at the limit, sense 4, "a man, irrespective of condition;—used esp. in
pl., in addressing men in popular assemblies." Robert Bellah notes that the lag was especially long in Japan, which in the 18th century, I have noted, had an economy as developed as England's in many respects:
Late Tokogawa Japan was already capitalist in the sense that it had a
well-developed market economy. . . . Merchants and later large-scale
capitalists wielded significant influence in both Tokugawa and Meiji Japan, yet I would argue that the dominant value system gave them little
legitimacy as independent claimants to power. . . . [During the 1880s] if
one manufactured toothpicks it was "for the sake of the emperor," hardly
the basis of a self-respecting claim to independence on the part of the capitalist class.217
Again it began as all this does in the Netherlands, followed by England. In his
brilliant analysis of the ground prepared in the late 17th century for the rise of the English novel in the early 18th century, J. Paul Hunter writes that in England in the late 17th
century “the cultural moment for journalism had come”---the very word “journalist,”
Welborn 1939, p. 24. Viner notes that the "quite modern-sounding" formulation was not in Peutinger an objection to "governmental regulation in
general or in principle. . . but specific forms of degrees of it" 1959, p. 61.
216 check who is speaking here: Hancock, 280.
217 Bellah 2003, p. 41.
215
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he notes, is first recorded by the OED in the 1690s.218 The coffee house made room for
newspapers and especially the flood of pamphlets and broadsheets, and the obsessive
discussion about them, and not only for the bourgeoisie.219 A French visitor observed in
1726 that in London even “workmen habitually begin the day by going to coffee-rooms
to read the latest news. I have often seen shoeblacks . . . club together to purchase a farthing paper.”220 Hunter concludes that “nowhere else does there seem to be, so early,
the obsession with contemporaneity that characterizes English culture in the beginning
of the eighteenth century.”
But Hunter is overlooking Holland, as people tend to do when writing about
England or France. What Hunter calls “the culture of now” was thriving in Amsterdam
decades before it became the rage in London. And the Dutch Republic developed a
theory of bourgeois rule decades before it had occurred to, say, English people that they
could behead an anointed king. The numerous portraits of shooters and civic guards
and boards of alms-houses (though only P percent of a late 17th-century collection: most
Golden-Age paintings were landscapes and still-lives to decorate the walls in a gray
climate) celebrate The Rulers, and the rulers were bourgeois.
Hunter instances for the English case “a tense sense of contrast with the tight
controls during Puritan rule.”221 Conservatives lamented, but the controls relaxed. As
Albert Hirschman argued, discussion and trade seemed sweet after a century and a half
of religiously-motivated orthodoxy and executions. Willey notes, “The distaste of the
eighteenth century for all violent forms of religious emotion was profound and lasting.
The lesson of the seventeenth century has burnt deeply into its soul. ‘There is not,’ says
Addison, ‘a more melancholy object than a man who has his head turned with religious
enthusiasm’.”222 It is hard to resist a pendulum, or dialectic, notion here, in which a reaction to the excesses of faith and hope yields at last c. 1700 to an age of equipoise and
prudence.
The counterbalance to religious enthusiasm was doux commerce, brought sharply
to the attention of recent writers by Hirschman in The Passions and the Interests. 223 The
image of mutual polishing in society like grains of sand was conventional: the Earl of
Shaftesbury had written famously in 1713:
All politeness [his master word] is owing to liberty. We polish one another, and rub off our corners and rough sides by a sort of amicable collision. To restrain this is inevitably to bring a rust upon men’s understanding. ‘Tis a destroying of civility, good breeding, and even charity itself.224
Shaftesbury was here speaking merely of the polishing of wit, but was aware of the
wider significance of an open market in ideas and in commodities. In the paragraph
preceding, he wrote:
Hunter 1990, p. 172
Hunter 1990, p. 173; and coffee-house book
220 Quoted in Hunter 1990, p. 174.
221 Hunter 1990 p. 178.
222 Willey, p. 233.
223 Hirschman, p.
224 Characteristicks 1713 1732, 2001, Vol. I, p. 42.
218
219
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By freedom of conversation this illiberal kind of wit [the gross sort of raillery] will lose its credit. For wit is its own remedy. Liberty and commerce bring it to its true standard. The only danger is the laying of an
embargo. The same thing happens here, as in the case of trade. Impositions and restrictions reduce it to a low ebb: nothing is so advantageous
to it as a free port.
Such arguments became 18th-century commonplaces. William Robertson sixty years after Shaftesbury: “Commerce tends to wear off those prejudices which maintain distinctions and animosity between nations. It softens and polishes the manners of men.” 225
And a French observer:
Commerce attaches [men] one to another through mutual utility.
Through commerce the moral and physical passions are superseded by
interest. . . . Commerce has a special character which distinguishes it
from all other professions. It affects the feelings of men so strongly that it
makes him who was proud and haughty suddenly turn supple, bending
and serviceable. Through commerce, man learns to deliberate, to be honest, to acquire manners, to be prudent and reserved in both talk and action. Sensing the necessity to be wise and honest in order to succeed, he
flees vice, or at least his demeanor exhibits decency and seriousness so as
not to arouse any adverse judgment on the part of present and future acquaintances; he would not dare make a spectacle of himself for fear of
damaging his credit standing and thus society may well avoid a scandal
which it might otherwise have to deplore.
Ricard, DDDD, quoted in Hirschman, 1982, p. 146 check page
The life of a merchant according to Smith is of course social and therefore—in
view of Smith’s highly social theory of ethics—ethical. Smith according to Christopher
Berry (1992) put great emphasis on the need to cultivate sympathy with strangers (this,
after all, is Sam’s point about “it is not from the ….”). Berry summarizes Smith this
way: “The ubiquity of strangers in a commercial society will have the effect of strengthening the character by making habitual the need to moderate one’s emotions. A
stranger is more like the impartial spectator. This spectator corrects ‘the natural misrepresentations of self-love’”(citing TMS, 147, 153-154, 137). So: a merchant or customer
must enter the mind of the other. Smith’s argument here is similar to his early point
about the difficulty of conveying indignation. “Smith can be interpreted as associating
the ideal of tranquility with the modern world of commercial interdependence and not
with the miserably impoverished world [admired by stoics ancient and modern] of selfsufficiency.”226
And down to a modern statement of the case by the economist Frank Knight
1934 (p. 317f):
There seems to be no room for doubt that commercialism, while it lasted
[he was writing when the future of commerce seemed dark], made for
225
226
Quoted in Hirschman, p. 61.
Berry p. 81.
123
tolerance and humanity, and to a significant extent practiced as well as
preached the doctrine of `live and let live.’ It encouraged friendliness and
good humor, and the sense of a basic human equality, among men of divergent rank and station. This was surely true to a degree far beyond anything ever seen in any other type of culture. And this was in addition to
its incomparable multiplication of the means necessary to a decent existence and they even more remarkable diffusion of these means among the
masses
There are two versions of doux commerce, and the second is the most important.
The first is that about “damaging his credit standing,” that is, doing well by doing good.
A life in commerce even if you do not have an ounce of any virtue other than prudence
will induce you---“give you the incentives,” say the modern economists and their fellow
travelers with a knowing smile---to behave yourself. Being known to be nasty is bad for
business---unless you are a defense attorney or a hired soldier for Blackwater Security,
Inc. It is the sort of ethics taught in many courses in business ethics in American business schools, especially if the teacher has in fact no knowledge of ethical thought. Honesty is the best policy. The trouble with the first version as a historical hypothesis is
that it has always been true, and operates entirely independently of the rhetoric of a commercial society. That is, it is equally true of the Bushmen of a Kalahari as it is of bond traders
on Wall Street. If honesty is the best policy (it isn’t, no always), why did capitalism not
develop in Namibia? So it doesn’t help us much in explaining how society changed to
make bond traders more common than bushmen.
The second version of doux commerce weaves in and out of the 18th-century
sources, being very prominent for example in Smith. It is that you do good, and have a
good life, by being. . . good---and that having a regular job, meeting people in the marketplace, having to cooperate with suppliers, staying up late to devise a new inventory
system, watching a steam engine closely to figure out how to make the pressure release
automatic, taking care over the formulation of a contract for shipments of coffee from
Batavia, dealing with the personal problems of ones apprentices, traveling to Surat or to
Cairo, and the other activities of a business civilization are not in themselves corrupting;
rather the contrary. Too much “structuring of incentives” makes people into serfs, not
ethical beings. The philosopher William Hausman makes the point, with Philip Pettit:
a system with too few possibilities for free-riding can undermine
public-spiritedness and moral commitments as well. Workers
who have to punch a time clock may be more likely to leave when
they have put in their eight hours than workers who are trusted to
fulfill their responsibilities. People can become what they are assumed to be, and with too much regulation people may not be
able to make trust-inducing overtures to one another.
Hausman 1998 p. 75 (he refers Pettit 1995, p. 225).
With the right balance of autonomy and incentives, virtue becomes in a commercial society a commonplace. Ah, doux commerce!
A different, classical republican view is that true virtue is extraordinary. It is
Machiavelli’s view, and implies that only a few are fit to participate in politics. The re-
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publican pessimism of Italy merged in the 16th century with Protestantism in the north
to produce a theory of passions barely under control. The fallen state of humans required societies to conserve on love, not depend on it. It was the great achievement of
the Dutch Republic, says the historian Robert von Friedeburg, to govern among
strangers.227 Literally strangers, as Wiep van Bunge noted on the same occasion: the
Dutch term vreemdelingen, “alien” from vreemd, “strange,” like English “stranger” but
perhaps with more awareness of its formation, was used for the lowest class of the
Dutch cities, below even the invoners, that is, unprivileged but resident population, and
far below the burgerij, the guildsmen and holders of public office. “Republican provincialism,” not some optimistic theory of democracy, ruled, and had to be democratized
before people could be free.
*
*
*
*
The coffee houses and theatres of the cities were the sites where freer bourgeois
values were theorized. Reactionaries like the Scotsman Andrew Fletcher in 1703 or the
Englishman Robert Southey in 1830 or the American Earth First! Movement in 2008
railed against the cities, crammed with the bourgeoisie and their workers. Anticapitalist proto-romantics around the mid 18th century like Rousseau and Goldsmith
praised the countryside, in ways conventional in philosophy and poetry since the
Greeks. Fletcher asked, “Can their be a greater disorder in human affairs” than “the exercise [in cities] of a sedentary and unmanly trade?” (quoted in Herman p. 42; Fletcher
had a few years before helped bankrupt the middle class of Scotland in the Darien
Scheme, which aimed to start a Scottish empire in, of all places, Panama).
This was always so, the quarrel between urban wealth and rural sufficiency
(“enough blessed with my country seat,” sang Horace in 23 B.C.E.). As John Pocock argues, “We can no longer hold that the beginnings of a modern political theory of property are to be found . . . in any simple transition from feudal to bourgeois values. We
must think instead of an enduring conflict between two explicitly post-feudal ideals,
one agrarian [Jeffersonian, e.g.] and the other commercial, one ancient and the other
modern” (p. 109). A jurisprudential notion of citizenship, he claims, undermines the
ancient notions: Europeans start to speak of people having “rights” to such things as
life, liberty, and the pursuit of happiness. Instead of property merely assuring one a
place in the polis it becomes something to be traded on for private, not public, purposes, a counter in an urban game.
Pocock claims with me that there is something new in the 18th century, and it is
"manners."228 He puts it late, I would put it early, but the difference has more to do
with the issues we are interested in than any substantive disagreement: he is speaking
of political philosophy, I am speaking of mere vulgar trade. But in any case the manners, he says, are a redefined "virtue." Pocock is interested of course in political philosophy. He speaks of the "humanist" approach to political philosophy associated with virPaper delivered to the symposium on Dutch Identity, Erasmus University, 6
May 2004.
228 Cite correct Pocock paper.
227
125
tues (going back to Aristotle) and the "legal" approach associated with rights (going
back to the stoics and Roman law). These are freighted words. Virtue, for one thing,
comes from virtus, manliness, and is used by Machiavelli in the old Roman sense.
The issue that Pocock faces is a central one: were cooperative norms the result of
internalized ethical codes or of fear of loss of reputation and social sanctions? Doux
commerce One or Two? It is certainly central, though of course it's going to be a devil of
a job to identify it, econometrically speaking. One argument for internalization is that,
as many have argued, there seems to be an actual rise in ethical standards in business.229 I here attach it to the rising prestige of the bourgeois life, attacked in Moliére
but by 1730 admired in "The London Merchant." If ethics were endogenous---merely a
result of causes already present in the economy---then it would already have risen, since
the incentives not to cheat were as big in 1300 as in 1800. It's hard to see why there
would be more of an endogenous effect in 1750 than in 1250.
The question political philosophy is supposed to answer is: how can a community flourish? One way to flourishing is to have good, virtuous people, somehow. The
other is to have good laws, and to give this person right X and that person right Y and
then carry on. Pocock argues that law-as-politics became uninteresting (in England: he
is here talking only about England) after it was established that citizens did have rights
against an anointed king, and in special circumstances could even cut off his head.230
The legal-constitutional issues were settled by 1688. So---Pocock claims---the virtue approach to politics was left. Politics came in the talk of early 18th-century England and
later in Scotland to be about virtue, not rights.
Now the problem perceived very sharply by observers of the increasingly commercial society in England and France---really, the Dutch model of stock exchanges and
so forth---was that commerce was corrupting. In Steven Shapin’s The Social History of
Truth one can read how at the Royal Society any commercial interest in a piece of scientific argument---even a commercial occupation outside the laboratory---spoiled a scientist's standing. Scientists had to be gentlemen in the pre-20th -century sense. The solution was to claim that commerce in fact created virtue itself, doux commerce, as Pocock
notes.231 The political classes of ancient Greece and Rome, which were constantly in the
minds of political men c. 1700, claimed to be uninvolved in commerce (the claim was
false, of course, but they had gone on making it, while accepting large payments from
their tenements in central Rome and their interest on loans on the grain coming into
Athens). Only holding "property" (Pocock means land) was an "assurance of virtue"
(think of Jefferson much later making this same argument). If people were to continue
in this way talking about ancient virtue and ancient law they were going to get nowhere
in dealing with the modern world----except to sit back and sneer at the vulgar tradesmen while sitting on the porches of their country estates. That's what the "neoHarringtonians" (as Pocock calls them) in fact did.
Cite Mokyr
On p. 364
231 p. 365
229
230
126
But most English people early in the 18th century and French people in the late
18th century decided against the sneer. Or at any rate enough did that the climate for
capitalism changed. (This is my assertion, though I reckon Pocock would agree.)
Pocock asserts that Law Came Back.232 That is, people like Smith thought in legal
terms, and used legal situations---whether one owned ones own labor, whether one
owned property---to define "stages," that set of ideas that still curses economic history.
His term at the bottom, "legal humanism," is a little witticism because it merges the two
conflicting strands of civic humanism (remember: virtue) and law (rights). "Now at
last," he concludes, "a right to things became a way [if you had proper manners, if, to
use another of their words, you were properly 'cultivated'] to the practice of virtue."233
Pocock leaves hanging the extent to which all this was a Marxian result of the commercial base changing. He is an anti-Marxist but willing, as he says earlier, to see where
some of it might apply. I myself think---and I suspect he thinks, too---that it was more
exogenous than that. It certainly in his mind had nothing to do with the behavior of
shopkeepers: he's talking about the high-theoretical discourse of the age. The emphasis
in Pocock is on "modifying and developing more and more aspects of [the citizen's] personality" (p. 365). In other words, if he were talking about commerce it would be the
second hypothesis of doux commerce. That is, a new kind of person emerges, with "capacities" called "manners." That is another way of putting the theme here.
The new dispensation was protected by the accident that it led at length to military superiority for Western liberal regimes. There was nothing automatic about this.
Being bourgeois does not automatically make you militarily formidable. More like the
contrary. Economic superiority in the end did not help the bourgeois Carthaginians
against the less commercial but more faithful Romans. In Europe the commercial superiority of the Hanseatic League stretching in N clusters of bourgeois from Bergen to
Deventer did not protect it against nationalism. Russia was a European power even
though it was painfully incompetent at the bourgeois arts. Unlike the Pope, Russia had
many divisions of soldiers.
Imagine a Europe around 1450 failing by some miracle to adopt Chineseinvented gunpowder or the North-Sea-invented ocean-going ship. In such a case, of
course, European imperialism would not have happened. But imperialism, left and
right to the contrary, was not crucial to Europe's success. What was crucial, and what
made the gunpowder and the ship crucial, was protecting a bourgeois Europe from aggressions from the Steppe far to the East, and more importantly from the European castle itself down the road. Without the military revolution of the 16th century the aristocratic and reactionary powers would have smothered innovation. How do I know?
They always had done so before. Compared at least with knightly armor or slavepropelled galleys, the gun and the frigate were democratizing technologies.
232
233
p. 366.
on p. 367
127
Indeed, this connects with Edgerton’s idea of Britain as a militaristic power. The nationalism of Britain here connects with the success of bourgeois virtues
worldwide. It required, however, as contemporaries well understood, a balance between protecting the bourgeoisie by military superiority from aristocratic/Christian reaction on the one hand and on the other the danger of ruining the bourgeoisie and the
economy by adopting for military reasons the very aristocratic/Christian values standing against the bourgeoisie. The City of London's opposition to the divine right of
kings, the fear of standing armies, the modest push-back to imperialism, . . . . . A military-industrial complex that embraces the modern and bourgeois world is certainly irritating in its country-club values and its proud display. We have seen the worst of it in
an imperial America. Yet even if it is moderately corrupt (gigantically corrupt is another matter), it is not all that dangerous. By contrast, military-industrial-faithful complexes that reject the modern and bourgeois world have tried repeatedly and with great
initial success to end the bourgeoisie—or, better, to transcend it. Thus the secularized
Christianity of 19th-century socialism, the Germany of the Kaiser and then of Hitler,
Wahabi Islam. Reread McNeill on military-industrial complex.
Additional paragraphs on: Montesquieu, Voltaire. English/Dutch model
spreads. French imitate a bourgeois atmosphere established early
in 18th century, which nourished Smith as well. Anti-Rousseau.
Deal with this point somewhere: James Q. Wilson is right to stress that the
universalization of obligation---or at any rate its notable broadening---is astonishing.
Once we cared only about our family or clan. Once “the Apache [or Scottish clansman]
would kill without remorse a warrior from another tribe, [but now] the philosopher
would feel obliged . . . to spare the life of a sociologist.” 234 Wilson argues that the cause
was above all the character of the family in Northern Europe, the “European marriage
pattern,” as the demographers call it.235 European marriages from as early as Augustine
stressed the joining of two souls voluntarily, not from the clan’s political needs.
Modern capitalism is commonly seen, in the words of the legal philosopher
James Boyd White, as “the expansion of the exchange system by the conversion of what
is outside it into its terms. It is a kind of steam shovel chewing away at the natural and
social world” (White 1990, p. 71). I don’t think so. I do not deny that an amoral capitalism, recommended by the country club, is damaging, though as a card-carrying Libertarian I must add that it often does its damage through an over-powerful government,
such as the independent authorities in the New York area run by Robert Moses. But the
growth of the market, I would claim, can be civilizing, too. It’s not the worst ethic to be
raised up to smile at customers and do an honest days work. Dr. Johnson said, “There
234
235
Wilson 1993, p. 194.
1993, pp. 200-207.
128
are few ways in which a man can be more innocently employed than in getting money”
(Boswell, p. 532; 27 March 1775).
Montesquieu had earlier not literally used the phrase “sweet commerce” (doux
commerce), but implied it: “Wherever one has sweet manners, there is commerce; and
wherever there is commerce there are sweet manners.236
The problem of social  individual ethics:
John Steinbeck in The Grapes of Wrath faced a problem faced by all observers of
society—economists and anthropologists, lawyers and novelists, poets and rock lyricists. It is to capture the “eighth-floor” view and the street-level view, both, and to
show what they have to do with each other. Both are true. It is true that 20 cents an
hour is rotten pay; it is also true that quantity supplied of labor must equal quantity
demanded. Steinbeck uses various novelistic devices to pull off the double view. But in
the end he is limited by his lack of understanding of the economy (i.e., an eighth-floor
view). He has no credible theory of why things happen, and so The Economy becomes
a natural force like the rain or a personified, ethical force like the cop beating a striker.
The Joads are seen as victims. Surely in many senses they are. But a victim does not
from the eighth-floor view imply a perpetrator. The growers, the police, the rest of the
society are in Steinbeck’s view simply bad: that, he says in the end, is the source of victimhood. His success at evoking the sadness of being a Joad implies—because his
eighth-floor view is inadequate—an oversimple analysis of What Is To Be Done: oh
bosses, he says, be good, and all will be well. Like Dickens, Steinbeck adopts a conservative view—though Dickens' Hard Times and Steinbeck’s The Grapes of Wrath made
many a radical, a youthful D. N. McCloskey among them. Steinbeck's success in the
small makes it impossible for him to make a persuasive criticism of the system—the system of capitalism, perhaps, or the system of imperfect capitalism raised by the conspiracy or growers and the local monopoly of banks.
236
Esprit des Lois, XX, 1: “partout où il y a des moeurs douce, il y a du commerce; et
partout où il y a du commerce, il y a des moeurs douce”
129
Back to (relative) coherence:
Chapter 13:
Smith Was the Last of the Former Virtue Ethicist
Smith was mainly an ethical philosopher. The recent literature from Knud Haakonssen (1981) through Charles Griswold (1999) and Samuel Fleischacker (2004, pp. xv,
48-54) says so, against the claim by the economists, believed for a long time, that he was
mainly an economist in the modern, anti-ethical sense. The taking of ethics out of Smith
began immediately after Smith’s death, in the reactionary era of the French Revolution.
To assure the British authorities and British public opinion that political economy was
not subversive, ethics was omitted. The Cold War inspired similar omissions, and it
may be that during the American conquest of economics a fear of radicalism supported
the anti-ethical reading of Smith.
But another reason the economists’ claim was accepted for so long, against the
textual and biographical evidence, is that Smith practiced what for a long time after
Smith was considered an obsolete sort of ethical philosophy, known as “virtue ethics.”
Virtue ethics somewhat mysteriously disappeared from academic circles after the 6th
and final and substantially revised edition of Smith’s own favorite of his two published
books, The Theory of Moral Sentiments (1759, 1790). Since 1790 most ethical theory as
practiced in departments of philosophy has derived instead from two other books published about the same time as Smith’s, one by Immanuel Kant (1785, for example Frankfurt 2004) and the other by Jeremy Bentham (1789, for example Singer 1993). A third
and older tradition of natural rights, which influenced Smith, too, by way of Locke and
Pufendorf, finds favor nowadays among conservative and Catholic intellectuals.237 And
the new contractarian theories of Rousseau, Locke, and Hobbes, to which Smith paid no
attention, has provided in our time a fourth, related, stream of narrow ethics paired
with grand political theory.238
But the fifth and by far the oldest and broadest stream is the virtue-ethical one. It
flowed from Plato and especially from Aristotle in his Nichomachean Ethics (c. 330 BC),
meandering through the Stoics, mapped by Cicero (44 BC), and channeled into Christianity by Aquinas (c. 1269-72). As I say, in the late 18th century this ethics of the virtues,
viewed until then by most Europeans as the only sensible way to think about good and
bad character, was pushed underground, at least in the academic theories of philosophers, re-emerging only in 1958.239
The 170 year reign of ethical theories new in the Enlightenment lasted until the
frailties of logic without context became clear, in the later Wittgenstein, for example,
Leo Strauss 1953, John Finnis 1980; cf. Hont and Ignatieff 1983; but then see Fleischacker 2004,
pp. 221-226.
238 Buchanan and Tullock 1962, Rawls 1971, Nussbaum 2006, and discussion in Chps. NN and
NN below.
239 Anscombe 1958, MacIntyre 1981, Nussbaum herself again 1986, Hursthouse 1999.
237
130
and in numerous other post-positivist thinkers. Before then “the notion that the mathematical method could be applied to ethics, rendering it a demonstrative science,”
writes Father Copleston of the proliferation of new ethical theories c. 1710, following the
examples of Hobbes and Spinoza, “was . . . common, . . partly because of the prestige
won by mathematics through its successful application in physical science and partly
because it was widely thought that ethics had formerly depended on authority and
needed a new rational basis.”240 By 1950 the Enlightenment program was in this respect looking frayed, though quite a few decades passed before the news began to reach
fields like economics or evolutionary biology. As Isaiah Berlin noted in his very last
paper on analytic philosophy, “no abstract or analytic rigor exists out of all connection
with historical, personal thought. . . Every thought belongs, not just somewhere, but to
someone and is at home in a context . . . which is not purely formally described” (Berlin
1950 quoted in Ignatieff 1998, p. 88).
Though Immanuel Kant knew and appreciated the 1759 edition of TMS in its
German translation, Smith even in 1790 knew nothing of Kant’s ruminations in far Köningsberg about the duty to follow generalizable ethical maxims. D. D. Raphael and A.
L. Mackie note that “the extent to which Smith was influenced by other moral philosophers of his time” was “remarkably small.”241 But he did know, and sharply opposed,
the reduction of what is good to what causes pleasure, that is, utilitarianism, if not in
the form of the “chaos of precise ideas” in Bentham’s An Introduction to the Principles of
Morals and Legislation, published in the year before Smith’s death. The utilitarian stream
began earlier than Bentham—for example in the writings of Smith’s David Hume,
though it also has ancient predecessors in the Epicureans, and it had modern ones in
figures like Bernard Mandeville (1714), in the extreme form of “license,” or for that matter Nicolò Machiavelli, in the extreme form of the virtú of the prince. Smith opposed
these. “In the opinion of [Epicurus, Hume, and the like],” Smith noted, “virtue consists
in prudence.”242 “That system. . . which makes virtue consist in prudence only, while it
gives the highest encouragement to the habits of caution, vigilance, sobriety, and judicious moderation, seems to degrade equally both the amiable [Hutchesonian] and respectable [Stoic and virtue-ethical] virtues, and to strip the former of all their beauty,
and the latter of all their grandeur.”243
Since Bentham, however, and especially since the anti-ethical turn in 20th century
economics associated with Pigou, Robbins, Samuelson, and Friedman, the economists
have interpreted Smith’s praise of the virtue of prudence to mean what the economists
meant by virtue, that is: you do uncontroversial good only by doing well. As the economist Frank Knight wrote in 1923, “the nineteenth-century utilitarianism was in essence
merely the ethics of power, ‘glorified economics’. . . . Its outcome was to reduce virtue
to prudence.”244 The turn towards prudence-only was renamed in the 1930s the “new”
Copleston 1959, p. 251.
TMS Introduction, p. 10.
242 TMS, p. 267.
243 TMS, p. 307.
244 Knight, 1923, p. 62.
240
241
131
welfare economics, attempting to build judgments about the economy on the supposition that virtue consists in prudence, with justice taken as sheer taste. If all are benefited, or could be benefited, the proposed policy is good. That is all ye know of ethics, and
all ye need to know.245 Smith did praise prudence as a virtue, especially in his book on
prudence. For example: “what is prudence in the conduct of every private family can
scarce be folly in that of a great kingdom.”246 But in his other published book one can
find hundreds of pages in praise also of other virtues, especially temperance, or of justice in the unpublished lecture notes taken by his students in 1762-63 and 1766. And
even in WN, unless one is pre-committed to seeing its implied hero as merely a confused precursor to Karl Marx’s Mister Money Bags or Paul Samuelson’s Max U, one can
find a good deal of ethical judgment more grown-up than “prudence suffices” or
“greed is good.” The economists on the contrary have usually believed, as the great
economist—and much less great student of the history of economics—George Stigler,
once put it, that “the Wealth of Nations is a stupendous palace erected upon the granite
of self-interest.”247
The actual, Kirkaldy Smith, by contrast, assumed a person with all the needful
virtues, in his accounting love, courage, temperance, justice, and self-interested prudence, too. From about 400 BC to about 1790 AD the moral universe was described in
Europe as composed of the Seven Principal Virtues, resulting by recombination in hundreds of minor and particular virtues. The Seven are a jury-rigged combination of the
four “pagan” or “cardinal” virtues (courage, temperance, justice, and prudence) and the
three “Christian” or “theological” virtues (faith, hope, and love, these three abide).
Jury-rigged or not, they are a pretty good philosophical psychology. The tensions
among the seven, and their complementarities, too, can be expressed in a diagram:
The Seven Principal Virtues
245 see Brown 1994, pp. 165-166 and footnotes for a discussion of such an “overly economistic”
readings of The Wealth of Nations; and Evensky 2005, Chp. 10, on the “Chicago Smith” vs. the “Kirkaldy
Smith”.
246
247
WN, IV.ii, p. 457.
Stigler 1975, p. 237.
132
133
134
Minor though admirable virtues such as thrift or honesty can be described as combinations of the principal seven. A vice is a notable lack of one or more of them. The seven
are in this sense primary colors. They cannot be derived from each other. Blue cannot
be derived from red. Contrary to various attempts since Hobbes to do so, for example,
justice cannot be derived from prudence only. And the other, minor colors can be derived from the primaries. You can’t derive red from maroon and purple. But blue plus
red does make purple, blue plus yellow make green. The Romantic and bourgeois virtue of honesty, for example, is justice plus temperance in matters of speech, with a dash
of courage and a teaspoon of faithfulness. Aquinas was the master of such analyses of
virtues and vices. He provides scores of examples in showing that the seven are principal. “The cardinal virtues,” he declares, “are called more principal, not because they are
more perfect than all the other virtues, but because human life more principally turns
on them and the other virtues are based on them.”248 Courage plus prudence yields enterprise, a virtue not much admired by Adam Smith, who recommended instead safe
investments in agriculture.249 Temperance plus justice yields humility, prominent in
Smith’s theorizing and in Smith’s own character, Fleischacker argues, accounting for his
principled modesty in social engineering.250 Temperance plus prudence yields thrift,
which Smith came to believe, erroneously, was the spring of economic growth.
You can persuade yourself in various ways that the Aquinian Seven are a pretty
good philosophical psychology.251 For example, you can examine each in turn, noting
its importance in human flourishing. Prudence is the executive function, and especially
when pursued alone can be thought of as self interest or rationality in attaining ends.
Justice is the social balance that answers to the personal balance of temperance. Courage is the characteristically male interest; love the female. Hope and faith are at first
puzzling, but less so when understood as the forward-looking virtue of imagination
and the backward-looking virtue of imagination. In other words, hope is the virtue of
having a human project. Faith is the virtue of having a human identity. They do not
have to be theological. But they do constitute, along with the higher form of love, what
the Greeks called agape, the “transcendent.”
Or you can imagine the miseries of a human life without one of the seven, a life
without courage, cowering in the corner; or a life without faith, without identity; or a
life without hope, left abruptly this afternoon with a bullet to your head.
Or you can ask people how they feel about the virtues. Alan Wolfe found in the
1990s that the particular named virtues, plural, mean a lot. Americans admire, for example, loyalty, that blend of the theological and pagan virtues. Or you can note that the
seven virtues figure in the stories people tell.
Or again you can compare the seven with virtues in other traditions, such as the
Confucian. The characterization by Bryan Van Norden of the ethical theory of “the Second Sage” in the Confucian tradition, Mencius (372-289 BC), is startlingly similar to the
Disputed Questions [1267-72], Art. 1, p. 112.
Brown 1994, pp. 7, 53, 177.
250 2004, pp. 34-35, 97, 99.
251 McCloskey 2006 .
248
249
135
Smith of TMS. Mencius’ grounds for opposing utilitarianism, for example, were identical to Smith’s: “Suppose someone suddenly saw a child about to fall into a well: everyone in such a situation would have a feeling of alarm and compassion—not because
one sought to get in good with the child’s parents, not because one wanted fame among
their neighbors and friends, and not because one would dislike the sound of the child’s
cries.”252 The “sprout” of such feeling, to use Mencius’ vocabulary, would be the “moral sentiment” posited by Smith. Moral sentiments in Smith, like Mencius’ sprouts, are
few but powerfully generative of the mature Impartial Spectator. Van Norden calls the
growth of a mature ethical character the “affective extension” of the Confucian
sprout.253 The sprout of benevolence, then, is the beginning of a moral sentiment of benevolence à la Smith. “Affective” extension is to be contrasted with what Van Norden
calls the “cognitive extension,” seen in Kant and Bentham and the like. The focus on
affect rather than cognition, I am saying, is very Scottish of Mencius. Again, “righteousness” (yi) in Mencius is “what is appropriate,” strikingly similar to the notion of
neo-Stoic and Ciceronian “propriety” elaborated in Smith.254 Indeed “propriety” is often paired with “righteousness” in the translations from the Chinese. And so forth. We
are in a different ethical universe from a Kantian or utilitarian one, but not all that different from virtue ethics in the West.
Or yet again you can look into the word of “positive” psychologists. Character
Strengths and Virtues: A Handbook and Classification (2004), lends empirical support to the
Seven, at any rate within the European tradition in which they were theorized.
From the Seven Principal Virtues, I say, Adam Smith chose five to admire especially. He chose the four pagan and Stoic virtues of courage, temperance, justice, and
prudence. To these he added, as virtue number five, a part of the Christian virtue of
love, the part which his tradition—such as that of his teacher at Edinburgh, Francis
Hutcheson (1725, 1747)—called benevolence. In expositing Plato’s system, for example,
Smith enumerates the Pagan Four, “the essential virtue of prudence,” the “noble” virtue
of courage, “a word [sophrosune] which we commonly translate temperance,” and “justice, the last and greatest of the four cardinal virtues.”255 In expositing Stoicism he repeats the four, also with approval, speaking of virtue as “wise [that is, practically prudent: Greek phronesis], just, firm [that is, courageous], and temperate conduct.”256 And
then benevolence: “Concern for our own happiness recommends us to the virtue of
prudence; concern for that of other people, the virtues of justice and beneficence,” “the
first . . . originally recommended by our selfish, the other two by our benevolent affections.”257 An Impartial Spectator develops in the breast which “in the evening . . . often
2A6 in Mencius, quoted in Van Norden 2004, p. 159.
p. 150
254 Van Norden 2004, p. 150.
255 TMS, p. 268 p. 269.
256 p. 282.
257 p. 262.
252
253
136
makes us blush inwardly both for our . . . inattention to our own happiness, and for our
still greater indifference and inattention, perhaps, to that of other people.”258
Notice the approach to explicitness in dividing virtues into feminine and masculine: “The man who, to all the soft, the amiable, and the gentle virtues, joins all the
great, the awful, and the respectable, must surely be the natural and proper object of
our highest love and admiration” (TMS III.3.35, p. 152). Christian/Stoic, Peasant/Aristocrat/ masculine/feminine, private/public. Smith attempts to combine the
two. In TMS he asserts, “Our sensibility to the feelings of others, so far from being inconsistent with the manhood of self-command, is the very principle upon which that
manhood is founded” (p. 152). The combination is not altogether convincing: but you
could take a feminist view, that Smith recommending
Smith’s particular admiration for what Hume had called the “artificial” virtues,
the three on which any society must rest, namely, temperance, prudence, and justice,
shows in Smith’s life plan to write a great, thick book about each: temperance is the
master virtue of TMS, prudence of WN, and justice (though “not only”: TMS, p. 342)
was to be that of a treatise on jurisprudence never completed. The other two virtues of
the Smithian five were courage in, say, entrepreneurship and love in, say, family arrangements. These stood apart from Smith’s central concerns for temperance, prudence, and justice. Contrary to what the men in Adam Smith ties believe, Smith detested buccaneer capitalism, with its emphasis on manly but imprudent courage. And as
feminist students of the matter have noted, Smith did not much emphasize family love.
Although he expected his dinner from the regard to their self interest of the butcher, the
brewer, or the baker, Smith neglected to observe that he expected it, too, from the love
of Mrs. Smith the elder in arranging to cook it.
Smith made his virtue-ethical approach clear enough in his works generally and
in TMS even in its 1759 edition, but most clear at the end of his life, in a Part VI added
in 1790 as he lay dying. {Reword this to add to what I say p. 306 of BV] A
concluding, climactic Section III, “Of Self-Command,” the master virtue in his book.
“The man who acts according to the rules of perfect prudence, of strict justice, and of
proper benevolence [love, that is] may be said to be perfectly virtuous” (p. 237). That
accounts so far for three of the seven principal virtues—prudence, justice, and love. But
suppose the man in question knows that he should act with prudence, justice, and love,
but can’t bring himself to do it? “The most perfect knowledge, if it is not supported by
the most perfect self-command, will not always enable him to do his duty.” “Extravagant fear and furious anger,” to take one sort of passion, “[are] often difficult to restrain
even for a single moment” (p. 238). The “command” of fear and anger was called by
the ancients “fortitude, manhood, and strength of mind,” which is to say the cardinal
pagan virtue of courage. “The love of ease, of pleasure, of applause, and other selfish
gratifications . . . often mislead us.” The ancients called the command of these “temperance, decency, modesty, and moderation,” that is to say, the single cardinal virtue of
temperance, so very much admired by the Stoics (pp. 338-339; compare pp. 268f, 271).
258
p. 262.
137
Smith then elaborates on the virtues of courage (pp. 238-240), temperance (pp.
240), a combined courage and temperance (self-command again, pp. 241-243), love
briefly (p. 243), cowardice and courage again (pp. 243-246), and then discusses at length
mere vanity as against proper self-esteem, figured repeatedly as temperance in judging
oneself (pp. 246-262). He asserts at the beginning of the section that “the principle of
self-estimation may be too high, and it may likewise be too low” (p. 246) and ends the
section by praising “the man who esteems himself as he ought, and no more than he
ought” (p. 261).
Such an analysis of temperance is no great advance on Aristotle’s golden mean.
But Smith did not seek striking originality in his ethical theory. He was building an ethic for a commercial society, but on the foundation of ethical thought in the West, not on
some novelty 1689 or 1785 or 1789. Smith’s main contribution to ethical theory in his
own estimation was the notion of the Impartial Spectator “reason, principle, conscience,
the inhabitant of the breast, the man within, the great judge and arbiter of our conduct”
(TMS, pp. 294, 137). (Smith’s use of dynamic theatrical metaphors such as the “Spectator,” by the way, has been emphasized by David Marshall [1986] and especially by
Charles Griswold [1999]). The argument shows in the book’s outline. Smith begins
with his own theory in Part I, “Of the Propriety of Action,” to which merit (Part II), duty
(III), utility (IV), and custom (V) are subordinated. The Spectator is formed at first by
upbringing and social pressure but at last evolves into a conscience, what was much
later to be called “inner direction.” Though well expressed, it was a routine piece of virtue ethics.
138
Chapter 14:
Smith was No Reductionist, Economistic or Otherwise
But the alternative and novel systems of prudence-only, or of love-only, or of anything-only, as Smith noted, did not work very well. Specializing a theory of ethics
down to merely one of the seven virtues—the economist specializing in prudence only,
for example, the theologian in love only—does not do the ethical job. Smith declares
himself on the issue early, indeed in the first clause of his book. “How selfish soever
man may be supposed”—then proceeds to show in the next 330 pages that a specialized
selfish account, like the one nowadays so popular with modern economists and evolutionary psychologists, does not suffice. On the fifth page he attacks prudence-only
again: “Those who are fond of deducing all our sentiments from certain refinements of
self-love think themselves at no loss to account” for sympathy. The supposed egoist
rejoices in expressions of approval of his projects, and is downcast by expressions of
disapproval, “But both the pleasure and the pain are always felt so instantaneously,
and often upon such frivolous occasions [for example in a theatre for the characters portrayed, as he later notes; or in an account from a remote history], that it seems evident
that neither of them can be derived from any such self-interested consideration” (TMS,
pp. 13-14). And so repeatedly throughout.
Smith is sometimes viewed as a Stoic in the mold of Epictetus.259 But such a view
can specialize him down to temperance-only. As Raphael and Mackie themselves put
it, “Smith’s ethical doctrines are . . . a combination of Stoic and Christian virtues—or, in
philosophical terms, a combination of Stoicism and Hutcheson. . . who resolved all virtue
into . . . a philosophical version of the Christian ethic of love.”260 Smith certainly admired the “manly” character of Stoicism, and he remarked in a letter that the atheist
Hume faced death “with more real resignation. . . than any whining Christian ever died
with pretended resignation to the will of God.”261 And I have said that Smith spent a
third of his life’s creative effort on the master virtue of TMS, that self-command or temperance-plus-courage so characteristic of a successful Stoic. In the Part VII of TMS dating from his lectures in the 1750s and included in the first edition, in which he surveys
the ancient and a very few of the modern systems of ethics, he spends a mere 4 ½ pages
on Plato and Aristotle together, 5 on Hutcheson recommending benevolence only, 5 ½
on Epicurus (really on Hume) and 8 on Mandeville recommending prudence only, but
fully 21 pages on Stoicism according to Zeno, Epictetus, Cicero, Seneca, and Marcus
Aurelius , 9 ½ of which are a disquisition on the Stoic attitude towards suicide added to
the 6th edition, apparently in reply to a notorious essay by Hume.
What Smith mainly took from his readings in Stoicism, however, was the system
of the virtues. That is, Smith was a virtue ethicist who learned his trade in a Stoic
FitzGibbons 1995; Raphael and Mackie 1976, p. 5-10.
TMS, “Introduction,” p. 6, italics supplied.
261 Letter 163, 14 August 1776.
259
260
139
school.262 His admiring pages on Stoicism are gathered in the 6th edition into the chapter of section VII entitled “Of those Systems which make Virtue consist in Propriety,”
that is, those attending like his own system to a set of virtues instead of merely to one.
In the section VI added in 1790 he argues against the specialized excesses of Stoic insensibility, or what we would now call Buddhist disengagement from the world, and recommends instead an active virtue, “that keen and earnest attention to the propriety of
our own conduct, which constitutes the real essence of virtue” (p. 244).
A man following propriety shows in a temperate way all the principal virtues.
That is to say, he shows a balance of all them, or selects the sub-set appropriate to the
occasion. The virtues are not cloistered, but take place in the practice of the vita activa.
Sunday mornings in church the virtuous person exercises chiefly the virtue of spiritual
love, Saturday nights on the dance floor the virtue of self-asserting courage, Mondays
through Fridays at her job in the bank the virtue of careful prudence.
Such was the ethically plural theme of Smith’s very last published writing. His
very first, to the memory of a merchant of Glasgow, remember, praised Stoicism in a
virtue-ethical key, admiring frugality, probity, plainness of manners, love of learning,
generosity of heart, great-heartedness, enduring courage, cheerfulness, candor, penetration, circumspection, and sincerity: admiring in short the bourgeois virtues, all of them,
together in a system, as virtue ethicists bourgeois or aristocratic recommend.
Vivienne Brown, who supports the notion that Smith in TMS thinks in terms of
the virtues, argues that by contrast WN cannot be seen as ethical at all, and declares especially that it “cannot be read as an endorsement of ‘liberal capitalism.’”263 She argues
that the highly “dialogic” character of TMS makes it an ethical work.264 The two texts
are seen as emphasizing two different sets of so-called virtues, in a hierarchy denying in
fact the lower set ethical any true ethical standing. “The truly moral virtues of beneficence and self-command in TMS,” she writes, “are those that define the moral agent as
engaged in a dialogic encounter with the self, a moral process of internal debate that is
represented by the metaphor of the impartial spectator.” In her reading “the other virtues of justice and prudence”—the main subjects of WN as against TMS—“are therefore
denominated as second-order, . . . [eliciting] a certain esteem, . . . [but not] truly moral
virtues.”265
It is Brown, not Smith, I would say, who thus “denominates” prudence and justice as second-order, in aid of downplaying Smith’s evident approval of the economic
parts of “the liberal plan of equality, liberty, and justice” (WN, p. 664). Brown’s ingenious application of Bakhtin’s notion of dialogic as against monologic discourse certainly
does illuminate the rhetoric of the two books. But speaking of rhetoric, WN was written
to influence policy under the control of men who fancied themselves as prudent above
all. To be effective rhetorically the book had to follow Smith’s own advice about anger
from which, Fleischacker argues [2004, p. 112], in 1759 he graduated; contrast Raphael and
Mackie, p. 18, “Smith had [by 1790] acquired an even warmer regard for Stoicism”.
263 1994, p. 53.
264 pp. 188, 195.
265 p. 208.
262
140
and indignation in TMS—“before resentment . . . can become graceful and agreeable it
must be. . . brought down below that pitch to which it would naturally rise than almost
every other passion” (TMS, p. 34). Nonetheless, Smith’s indignation regularly broke
out in WN, as Brown admits (Brown 1994, p. 190). WN, as Griswold (p. 260-261) and
Fleischacker (throughout) argue, is an ethical book. One can agree with Brown that ethics depends on “a moral process of internal debate.” But justice and prudence in Smith
are not treated so non-dialogically as Brown argues. In both books Smith gives hundreds of instances of the Impartial Spectator staging an internal debate about even these
“second-order” virtues.
I noted the revival of virtue ethics after Elizabeth Anscombe’s essay in 1958
“Modern Moral Philosophy” (the revival, by the way, has been led notably by women;
ethics is the only part of academic philosophy with a substantially feminine voice,
heard since the 1950s). The revival directed attention to the desirability of talking about
a set of virtues directly, rather than talking in Enlightenment style only of allegedly
universal principles. “It would be a great improvement,” wrote Anscombe, “if, instead
of ‘morally wrong,’ one always named a genus such as ‘untruthful,’ ‘unchaste,’ ‘unjust’”
(Anscombe 1958 [1997), p. 34).
But where does one stop in listing the virtues of, say, truthfulness, chastity, justice, and the like? A list of 170 virtues would be so broad as to be useless. The point is
worth stressing here because Smith’s definite five virtues, and his emphasis on the joint
cultivation of the five by the Impartial Spectator, puts him solidly in the older tradition
of virtue ethics. Some virtue ethicists after 1958 have no definite list in mind, or a very
long one, a fault which the classical virtue ethics of Smith avoided.
Modern ethical philosophy has indeed two opposite faults of quantity. The one
is to let virtues proliferate, leaving us to struggle with the 170 words for “virtues” in the
main headings of "Class Eight: Affections” of Roget’s Thesaurus (edition of 1962). That
would be like the 613 commandments of orthodox Judaism, Hillel’s count. The study of
Kant and Bentham (or indeed of the Torah) imposes a healthy discipline on such proliferation.
But the study of Kant or Bentham leads, alas, to the other fault of quantity, acknowledging too few virtues to fit the stories of our lives—for example, one virtue only,
The Good, the categorical imperative, the greatest happiness. Or else it chooses one of
the seven, such as prudence or love or justice, to stand for all. Smith’s better plan is to
stop as Epictetus or Aquinas did with a definite yet pretty-well comprehensive list of a
moderate number of the principal virtues. That way you know better what you are
talking about. Five or seven is a mean, if not a particularly golden one, between N= 1
and N = 170 or 613.
The clerisy nowadays views Aquinas as Catholic dogma, and therefore as something unnecessary for us Protestant or anti-clerical intellectuals to read. And so the Divine Doctor’s seven do not get much of a hearing in secular discussions. Philippa Foot
on the contrary argued in 1978 that "Summa Theologica is one of the best sources we have
for moral philosophy, and moreover . . . St. Thomas' ethical writings are as useful to the
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atheist as to the . . . Christian believer."266 But she and Alasdair MacIntyre are among
the handful of ethical philosophers to realize it, and to take Aquinas’ numbering seriously. Foot for instance wrote that “nobody can get on well if he lacks courage, and
does not have some measure of temperance and wisdom [her word for what Smith and
I call prudence], while communities where justice and charity [her word—referring to
the King James Bible—for what I call secular love and Smith calls benevolence] are lacking are apt to be wretched places to live, as Russia was under the Stalinist terror, or Sicily under the Mafia” (1978, pp. 2-3). That is five out of the seven virtues, counting from
the bottom of the diagram, just the five that Smith selected.
FitzGibbons regards Smith as an enemy of Aristotelianism and of fundamentalist
religion (which two FitzGibbons tends to merge), and claims with considerable justice, I
have noted, that Smith was a “Ciceronian Stoic.” My claim is that Smith, if a Stoic, was
willy-nilly therefore the last of a tradition of virtue ethics dating from Aristotle and perfected by Aquinas and practiced by the casuists whom Pascal and other one-virtue theorists began to assault in the 17th century (Toulmin and Jonsen 1987). The one characterization of Smith emphasizes his Stoicism; the other emphasizes the wider technique
of ethical pluralism of which Stoicism is one example and of which St. Thomas Aquinas
is another and more sophisticated version. Both characterizations can be true.
This is not to say that Smith was a close student of Aquinas or of other Christian
thinkers. He was not. About Jesuit casuistry he was scathing, in a passage added in
1790: “Books of casuistry. . . are generally as useless as they are commonly tiresome,”
because they do not change people’s dispositions. “With regard to one who is negligent
in his [duty], the style of those writings is not such as is likely to awaken him to more
attention” (TMS, p. 339). In the 18th century St. Thomas had nothing like the prestige he
has acquired from the neo-Thomism initiated in the late 19th century by Pope Leo XIII.
In 1759 in a Protestant country even a scholar of Smith’s quality was liable to suppose
that little could be learned from the Goths and Vandals of the Middle Ages—thus
“gothic” in this sense, which was before the Romantics a term of contempt. He scorns
“a scholastic or technical system of artificial definitions, divisions, and sub-divisions;
one of the most effective expedients . . . for extinguishing whatever degree of good
sense there may be in any moral or metaphysical doctrine” (TMS, p. 291). In the one
place where he might have noted, if he had known it, that Aquinas unlike the lesser
theorists of “the benevolent system” gives full weight also to the secular and pagan virtues, he does not (TMS, p. 301). He leaps from “many ancient fathers of the Christian
church”—which pointedly leaves out Aquinas, who was medieval, born eight centuries
after the death of the last of the “ancient fathers,” the last at any rate in Western Christendom, St. Augustine—right to the Reformation, in which the benevolent system “was
adopted by several [Protestant] divines of the most eminent piety and learning,” and
then by Hutcheson, “the most philosophical, . . the soberest and most judicious.”
Smith appears to have had read mere summaries of “the schoolmen,” as he
called them impatiently, using in discussing courage and temperance for example the
266
1978, p. 2.
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Aquinian distinction between the “irascible” emotions (that is, hot, angry emotions;
TMS, 268) and the “concupiscible” (that is, appetitive; recent English translations of
Aquinas’ Latin prefer instead “concupiscent”). Smith never quotes or refers to Aquinas
or any other schoolman directly by name, and a doctrinal influence is untraceable. The
power of such evidence, admittedly, is low, since Smith does not quote anyone much at
all. Even David Hume, whose doctrinal influence is palpable in Smith, is not actually
quoted, though often answered. But anyway Smith, in common with some recent writers who at this date should perhaps know better, skips over the Aquinian and later
Christian syntheses of Stoic and theological virtues, courage-temperance-justiceprudence plus faith-hope-love, adding up to seven. Nor was Smith even, to speak of
the acknowledged root of Aquinas’ tradition, a self-conscious Aristotelian. As Fleischacker observes, Smith’s egalitarianism implies a virtue of humility, for example, that
Aristotle would have found very strange indeed.267 In Smith’s summary history of ethics in TMS the Philosopher gets only two pages, and those focused not on Aristotle’s
somewhat rambling listing of the virtues but on the doctrine of the Golden Mean, so
suitable to an Impartial Spectator.
I am merely arguing that Smith, in sharp contrast to his great contemporaries in
ethical theorizing, was a virtues man, a follower of Aristotle and therefore of Aquinas
and also of the Stoics in emphasizing a system of multiple virtues—and indeed precisely five of the seven Aquinian virtues. That is to say, until its revival in the 1970s he was
indeed the last great virtue ethicist. Smith puts Plato (in parts), Aristotle, the Stoics, and
in shadowy form the schoolmen into the tradition of “propriety” as against prudencefor-self or love-of-others. “If virtue. . . does not consist of propriety [which is to say the
balance in the soul recommended by Aristotle, the Stoics, Aquinas, and Smith himself],
it must consist either in prudence [thus Smith’s friend Hume] or in benevolence [thus
Hutcheson]. Besides these three, it is scarce possible to imagine any other account can
be given of the nature of virtue” (TMS, p. 267). All ethics in Smith was divided into
these three: propriety, prudence, and benevolence/love. In choosing the first, the multiple virtues of propriety, he chose to stand with the tradition of Aristotle and Epictetus
and Aquinas against the monism of Plato (reducing justice and prudence and courage
and temperance to The Good) or of Hobbes and early Hume (reducing The Good to
prudence only) or of Hutcheson in a late and literally sentimental version of Christianity (reducing all the virtues to love alone).
As a virtue ethicist Smith disliked all such reductions. “By running up all the
different virtues . . . to this one species of propriety [namely, ‘the most real prudence’],
Epicurus indulged a propensity,” Smith noted, “which philosophers. . . are apt to cultivate with a peculiar fondness, as the great means of displaying their ingenuity. . . to account for all appearances from as few principles as possible” (TMS, p. 299). It is Ockham’s Razor, with which so many philosophers have cut themselves shaving. Parsimony, after all, is not the only intellectual virtue. In his very method Smith recommends a
balance of the virtues, historical relevance balanced with parsimony, justice in summa267
Fleischacker 2004, p. 74.
143
rizing other philosophers balanced with hope in going beyond them. And therefore in
substance he avoided the utilitarian pitfall, into which Hume gazed fondly and into
which Bentham enthusiastically leapt, of reducing all other virtues to prudence alone.
Love was one of the Smithian virtues, but balanced with pluralism. In TMS the
“amiable” Christianity of Hutcheson came in for criticism chiefly because it tended to
suppose that “the mixture of any selfish motive, like that of a baser alloy, . . . took away
altogether the merit that would otherwise have belonged to any action” (TMS, p. 302).
According to the system of love-only “self-love was a principle which could never be
virtuous in any degree or in any direction” (TMS, p. 303). Such a specialized version of
Christian love violated the propriety of a balanced set of virtues. And indeed, as Smith
would have discovered had he looked into Aquinas, it violated Christian orthodoxy.
Hutcheson’s False Lemma, Smith noted, implies that “virtue must consist in pure and
disinterested benevolence alone” (TMS, p. 302). The same fault infects Kant, with justice put in the place of love. Smith was a virtue ethicist, not an ethical reductionist.
*
*
*
*
Smith’s confining of attention to five virtues avoided the errors of quantity in
modern ethical thinking—too many virtues or too few. The other two errors are of
quality and of object. Smith’s obsolete virtue-ethical system avoided them as well.
The most prevalent error is that of quality, the reduction of ethics to taste, or rather to “mere” taste, viewed as analogous to a taste for chocolate ice cream. It was articulated philosophically by the logical positivists and their descendents. The theory is
called officially “emotivism,” “the doctrine that all evaluative judgments and more specifically all moral judgments are nothing but expressions of preference” (MacIntyre 1981,
p. 11, his italics). Or as Hobbes wrote in 1651, “Good and evil are names that signify
our appetites and aversions.”268 Most academics and other intellectuals nowadays,
without giving it much thought, adhere to the emotivist, chocolate-ice-cream theory.
They view the ethical person as maximizing her utility function with respect to the doing of good deeds, just as she does in the eating of ice cream. No duty, love, faith, or
persuasion matters, The sort of amiable, casuistic reasoning together that the virtueethical and rhetorical tradition recommends, the trading of “more or less good reasons,"
as the literary critic Wayne Booth put it, such as the stories of good or bad lives ranging
from the Hebrew Bible and Plutarch to the latest movie, is spurned. No persuasion,
please: we’re positivists.
We can’t have reasonable ethical lives, the virtue ethicists like Smith claim, if we
depend only on a narrow definition of reason. “But though reason is undoubtedly the
source of the general rules of morality,” Smith noted, without much optimism that
“general rules” are much help, “it is altogether absurd and unintelligible to suppose
that the first perceptions of right and wrong can be derived from reason” (TMS, p. 320).
But such taste is not “mere” in Smith, to be determined without education or reflection.
It is rather the providing of good reasons, yielding “reason, principle, conscience, the
268
1651, I, Chp. 15, p. 82; and I, Chp. 6, p. 24.
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inhabitant of the breast, the man within, the great judge and arbiter of our conduct”
(TMS, p. 137).
The other characteristically modern error in thinking about ethics is an error of
object. The error is more technical than the chocolate ice cream theory, and is committed especially by analytic philosophers venturing into ethics. It reduces ethics to matters of how you treat other people. That might seem to be no error: surely ethics is about
altruism? No, it is not, not only. Look back at the diagram, and note the ethical objects
of self, of others, and of the transcendent. The good life will involve all three. Triple.
All right. Smith analyzes good and bad not as a specialized prudence or justice
or temperance but as a proper balance among five of the seven Aquinian virtues. We
will not grasp his argument if we insist on making it lie down on a Kantian or a utilitarian bed, as analytic philosophers amateur and professional have tried to do.
But something is missing. In choosing his five virtues Smith drops the two transcendent virtues of hope and faith, with the transcendent version of love going beyond
love for people, agape as against the philia or eros in the precise Greek. There is no question that Smith realized what he was doing. He knew perfectly well that hope and faith
and agape were principle virtues in Christian thought—this would have been clear even
in the secondary descriptions of Scholastic thought—though he may have lacked a direct understanding of Aquinas’ role in the construct. But if someone lacks "strengths
that forge connections to the larger universe and provide meaning,” in Peterson and
Seligman’s words, she does not have a fully human life. Or as the Anglican theologian
Richard Hooker put it in 1593, “Man doth seek a triple perfection: first a sensual . . . .
then an intellectual. . . . Man doth not seem to rest satisfied . . . . For although the beauties, riches, honors, sciences, virtues [which means ‘power’ here], and perfections of all
men living, were in the present possession of one; yet somewhat beyond and above all
this there would still be sought and earnestly thirsted for.”269
The reason Smith neglected hope and faith and agape is not obscure. He shared
with Enlightenment figures such as Hume and Voltaire an aversion to any alleged “virtue” that could be seen as conventionally religious. Hope and faith looked to advanced
thinkers in the 18th century horribly conventionally religious, and anyway dispensable.
Let us build a new world free from religious superstition, free from the wars of sects,
free from the meddling of priests and dominies, they cried. Let us dispense with
“hope” and “faith,” and establish a new. . . uh . . . faith on the . . . uh. . . hopes for reason
and propriety.
The Christianity that Smith opposed was the rigid Calvinism still influential in
Scotland at the time, no longer ascendant but able (with some help from the benevolent
Francis Hutcheson) to keep atheists like Hume out of the universities; and the Catholicism that could in France still warrant the conviction of a Protestant, Jean Calas, alleged
on slender evidence in 1762 to have murdered his suicidal son to prevent the son’s conversion to Catholicism. The religious fanatics with which Scotland had recently had so
much experience impute “even to the great Judge of the universe. . . all their own prej269
First Book, IX, 4, pp. 205-206.
145
udices. . . . Of all of the corrupters of moral sentiments. . . faction and fanaticism have
always been by far the greatest” (TMS, p. 156). Smith wanted, as did Hume and Kant
and Bentham for that matter, to bring ethics down to earth: “The most sublime speculation of the contemplative philosopher can scarce compensate the neglect of the smallest
active duty”(TMS, p. 237). One can hear him including the theologian and other advocates for the transcendent in that phrase "contemplative philosopher." Compare
Hume's sneering at "divinity or school metaphysics" and the “monkish virtues.” Thus
Hobbes without God, Vico without God, Hume without God, Kant without God. No
monkish virtues of hope and faith, please: we’re Enlightened.
Adam Smith’s error was the error and the glory of the Enlightenment, trying to
liberate us from transcendence.
But anyway the hope and faith and transcendent love slip back into Smith, as into Kant and the rest, although by the back door unobserved. The Impartial Spectator, or
the Kantian or even the Benthamite equivalent, are not merely behavioral observations
about how people develop ethically. They are recommendations. Recommendations
depend on faith and hope and transcendent love, articulated from the identity of an urbane resident of Edinburgh, for example, hopeful for a rather better society, loving
sweetly the imagined result. As Fleischacker notes, “When we ask after the ‘nature’ of
human beings we are looking for what human beings ‘really’ want, beneath the surface
trappings. . . . Human nature always includes what people aspire to, for Smith; it is
never reduced [as in the economist’s version of utilitarianism] to the desires they merely
happen to have.”270
And how was this faithful and loving hope, this aspiration to full humanity, to
be achieved? Through cultivating the seven virtues—or Smith’s Five, with hope and
faith and transcendent love knocking at the back door.
270
2004, pp. 61, 63.
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Chapter 15:
“Hobbesian” Prudence is Not Sufficient
But it is bourgeois virtues as a system and as a whole that is good. A
simplified version of bourgeois virtues takes Prudence as all. The passions, however, played against the virtues, and not merely against the interests; it was not merely a balance of Interests that tamed the passions.
Not all is selfishness.
But the rise of prudence and quantification could, and in the event did, undermine the other virtues. The rise of prudence led naturally but unhappily in European
theories to a collapsing of all virtues into it. Thus Hobbes, Rousseau, Bentham, Marx,
Freud, and the modern economists. Sin is one or two virtues unbalanced. Collapsing
all virtues into love and faith results in a theocracy. Collapsing all virtues into hope and
courage results in war. Collapsing all virtues into prudence results in the Enlightenment, but also, alas, Thomas Gradgrind and Gordon Gekko and their non-fictional
brothers.
The philosophical version of prudence only is often called Hobbesian. The identification of Thomas Hobbes with a modern, prudence-only version of economics and
political science is by now conventional, based on such passages as this most famous
one, following on his axiom that the state of nature is a “war of all against all”:
where every man is enemy to every man. . . . there is no place for industry, because the fruit thereof is uncertain: and consequently no culture of
the earth; no navigation, . . . . no account of time; no arts; no letters; no
society; and which is worst of all, continual fear, and danger of violent
death; and the life of man, solitary, poor, nasty, brutish, and short.
Leviathan 1651, I, 13, p. 64f.
It is a fine statement of how prosperity for all depends on private property for some.
And in the next chapter another passage that without the “–eths” could come from a
20th-century economist:
If a covenant be made wherein neither of the parties perform presently,
but trust one another, in the condition of mere nature (which is a condition of war of every man against every man) upon any reasonable suspicion, it is void . . . . For he that performeth first has no assurance the other will perform after, because the bonds of words are too weak to bridle
men’s ambition, avarice, anger, and other passions, without the fear of
some coercive power. . . . And therefore he which performeth first does
but betray himself to his enemy.
Lev. I. 14, p. 70f.
The obvious mistake seems to be the axiom (“upon any reasonable suspicion . . . the
bonds of words are too weak”) that family, civil society, ethical conviction has no effect,
that power is all that “really” motivates people. Hobbes supposes here (though not
147
consistently in all his work) that there is nothing aside from coercive power making
people perform—it is part of his strict materialism. The axiom is of course false. And he
leaps from a logically valid assertion about the condition of mere nature, under his erroneous axioms about why people behave as they do, to a scientific assertion about the
extant world. Two faults in logic. So much for Thomas Hobbes.
But one must take care. Michael Oakeshott, who characterized Leviathan as “the
greatest, perhaps the sole, masterpiece of political philosophy written in the English
language,” noted “a deplorable overconfidence about the exposure of faults in Hobbes’
philosophy. Few accounts of it do not end with the detection of a score of simple errors.”271 Unlike some of his modern rational-choice followers in, say, international relations, Hobbes was in truth quite aware of the power of words, as his very selfcontradictions on the matter show. Stephen Holmes uses a reading of the posthumous
work (posthumous because his friend Charles II thought it unwise to have it published)
Behemoth: The History of the Causes of the Civil Wars of England (finished in 1668) to argue
that “Hobbes’ preoccupation with the sources of human irrationality . . . clashes rudely
with the ‘rational-actor’ approach that many commentators project onto his works. Despite a few memorable and citable passages, he does not conceive of man as an economic animal.”272 Memorable and citable passages such as the war of all against all/
People in Hobbes---for example the royal and Parliamentary actors in the Civil
War he had perilously lived through—are motivated by words, norms, beliefs, rhetoric
as much as by coolly calculated interest. Thus Ronald Reagan’s insult to the Russians,
“evil empire,” was more than froth. It outraged the Soviet communists because they
knew its rough truth, and felt the shame. Calculating machines of the sort imagined in
“realist” international relations would not be shaken by mere rhetoric. Though Hobbes
was interpreted as a theorist of rationality in his own time---by Christopher Wren, for
example, and later by almost everyone---that is not his theory. He is a theorist of the
passions, which he was vividly aware could be aroused by mere rhetoric. The word
“rhetoric” first begins to acquire its present-day air of disrepute in the 17th century. No
wonder Hobbes's readers have missed the point of his criticism of false speech. He has
been misread the same way that Adam Smith has, as a Prudence-Alone theorist who
thinks prudence rules without the bonds of words.
In the extant world, of course, as Hobbes would have agreed, some words do
bind. We are governed by little else: the proverbs learned at Mother’s knee, the ethical
system of the playground, a teacher’s rules, a friend’s advice, an enemy’s jibe, a highway code (written and enacted, two different ones), a lover’s complaint; movies, cartoons, jokes; scriptures and sermons; advertising; gossip. There is nothing intrinsically
shameful about this. It is human, with good results as well as bad. In a review of Bryan
Caplan’s engaging book on the irrationality voting or of acquiring the political sophistication to vote rationally, Louis Menand expressed well the problem with prudence-only
271
272
Oakeshott 1946 and 1974, “Introduction to Leviathan,’ reprinting in Hobbes of
Civil Association, pp. 3, 59.
Holmes 1995, p. 78.
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guides to life: “people are less modern than the times in which they live.”273 He means
that people are moved by matters of love and faith and justice as much as by prudence,
and therefore are moved by rhetoric---though there’s a rhetoric, too, of the science of
prudence and even of a life of prudence in a market. 274 The only mistake is to think
with Max Weber that “modern” means “rational in a sense that Jeremy Bentham and
the modern economists would have approved of.” We have always been modern, or
never have been modern.275 They mean the same thing, namely, that the image of modern people guided exclusively by the best science is false. In fact, the best scientists
themselves are governed by passions.
Because this is evidently so, and because Europe was engaged in religious wars
nominally about words such as "eucharist" and "predestination," Hobbes like many of
his contemporaries was suspicious of eloquence. He and Bacon, Descartes, Spinoza,
Newton, and the others devalued it at every turn, though of course practicing it with
great skill. Among numerous self-contradicting assertions in this regard is, from Leviathan: “for metaphors . . . . seeing they openly profess deceit . . . to admit them into counsel, or reasoning, were manifest folly.”276 Yes, dear Thomas, like speaking of a metaphor “professing” deceit, as though it were a man, or of a metaphor “admitted” into a
council chamber. Yet one can sympathize with Hobbes, writing in England's time of
troubles, or with any of those rhetorically brilliant enemies of rhetoric in the 16th century trying to bring sense to a continent which had taken leave of it.
The modern cynic (and he is legion) replies that “basically” or “really” or “ultimately” behind all the words is individual passion and the coercion that controls it.
Hobbes does appear to believe that passions are usually men’s motives. What he does
not believe, Holmes shows, is that the passionless prudence of the rational man dominates human affairs. Hobbes was no cool utilitarian, either in his own person or in his
view of how people behaved.
*
*
*
*
He had nonetheless some strange beliefs about behavior, as behaviorists often
do. When Hobbes speaks of families, for example, he attributes their cohesion to sexual
attraction alone. No words of love bind. Concord in “the government of small families,” he declares offhandedly in the great Chapter 13 of Leviathan, “dependeth on natural lust.”277 He later repeats that he means “where there are supposed no laws of matrimony; no laws for the education of children,” that is, in the state of mere nature.278
But he does not mention love within the family, and was never married himself (though
Menand 2007, p. 91.
McCloskey 1985[1998].
275 Latour **date.
276 Leviathan I.8, p. 34; cf. p. 13 [“metaphorically. . . in sense other than they are
ordained for”], p. 21 [“Metaphors. . . instead of words proper”], p. 22
[“Metaphors, and senseless and ambiguous words”], and throughout his
writings.
277 Leviathan, I, Chp. 13, p. 65.
278 Chp. 20, p. 105.
273
274
149
he did father an illegitimate daughter, to whom he behaved honorably). Only the laws
bind people, he says, with the cudgel propped in the corner. His brief mentions of human love in Leviathan would satisfy the crudest utilitarian: “That which men desire, the
are also said to LOVE. . . . so that desire and love are the same thing.”279 In Elements of
Law (23.10; cf. Leviathan II.20) he identified the patriarch as a little king (a very common
figure of speech in a patriarchal century), “and therefore I shall no more speak of [family and kingdom], as distinct, but as of monarchy in general.”280 Hannah Arendt’s complaint against Marx, as Allan Megill notes, was just such a reduction of the sphere of intimacy to the socio-economic: the division of labor “was originally nothing but the division of labor in the sexual act.”281 Marx and Engels in The German Ideology The very
word “love” is not common in Hobbes, used often (one might say metaphorically) in
the sense of prideful delight, as a “love” for ones own opinions. Perhaps Hobbes’ life
experience overcame his common sense. He was abandoned by his father and raised by
an uncle. Still, he was treated lovingly all his life by the Cavendish family.
We are unsurprised to read in the Essays of Hobbes’ employer and model that
love, construed merely as lust and irrational infatuation, is “the child of folly”:
They do best who, if they cannot but admit love [that is, banish it entirely], yet make it keep quarter [within its proper limits], and sever it wholly
from their serious affairs and actions of life; for if it check [i.e., interfere]
once with business, it troubleth men’s fortunes, and maketh men that
they can no ways be true to their own ends.
Bacon, Essays, “Of Love”
(first included in the 1612 edition), p. 27.
This is madness, except under a 17th-century theory that any strong virtue is a “passion.” One among its many faults is that it imparts no point to the “serious affairs and
actions of life.” "Concern for ourselves," as the philosopher David Schmidtz puts it,
"gives us something to live for. Concern for others as well as ourselves gives us
more."282
*
*
*
*
*
The dissolution of "intentional communities," as they are called by sociologists, is
painful. The loss of friendship, the divorce of lovers, the fall of business collaborations,
the breakup of that old gang of mine are little deaths of human solidarity. Generation
upon generation of utopian communalists, monks of the desert, English folk in New
Harmony, Indiana, have seen it and cried out. William Bradford in his old age, about
1650, after serving faithfully and well as governor of Plymouth Plantation for over three
decades, wrote of the community there, early and late, "O sacred bond, whilst inviolably preserved! How sweet and precious were the fruits that flowed! . . . But (alas) that
Chp. 6, p. 24.
Elements of Law 23.10; cf. Leviathan II.20.
281 Quoted in Megill 2002, p. 260.
282 Schmidtz 1993 1996, p. 168.
279
280
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subtle serpent hath slyly wound in himself under fair pretenses of necessity and the
like, to untwist these sacred bonds."283 Intentional cooperation does have sweet and
precious fruits But also bad. But unintentional too. We need to prepare
for that possibility.
Whether Hobbes was a consistent Hobbesian, then, is doubtful. But he did express vividly the results of selfishness. An example of the “Hobbesian” confusion in
modern thinking is what is known in economics as the Voting Paradox. It is “paradoxical,” notes the economist, that people bother to vote at all in large elections, because
prudence would keep them at home. No one vote will affect the outcome---unless the
American presidential election of, say, 1856 was literally an exact tie, a vanishingly improbable event in prospect, and false in retrospect. A prudent man would therefore
never vote, if voting had (as it does) the tiniest inconvenience.
And yet people do vote, and did in 1856. Uh, oh. Well. Some other motives than
prudence must be explaining the behavior. Love, perhaps. Or Justice. What I have called
the S variables of society, speech, the Sacred as against the P variables of profit, price,
prudence, the Profane.284 As George Santayana said of English liberties in America,
“These institutions are ceremonial, almost sacramental. . . . They would not be useful,
or work at all as they should, if people did not smack their lips over them and feel a
profound pleasure in carrying them out.”285 Sic transit an entirely self-interested theory
of voting for the Northern tariff before the Civil War, or the free coinage of silver, or
New Deal spending. It won’t do to say, as the great economist George Stigler said to
me once in angry rebuttal, that if the “observable implications” of the prudence-only
model fit, that is all we need to know. Considerations of statistical power and specification error aside (I say to my economist colleagues), participation in elections is an observation, too, my dear George, an observation that annihilates the anti-Smithian theory
before it has had time to speak.
The economist Tyler Cowen is one of the numerous recent challengers of the
Hobbesian line of prudence-only in the social sciences. The virtues of faith and hope
are also demanded by human societies, especially human societies with language.
True, the mere survival of a society depends on solving the problem of order, through
what Hume called the “artificial” (that is, profitable, technical, social, interested, and
quantitative) virtues of prudence, temperance, and justice. But as Cowen notes “the
developed Western democracies do not appear to face imminent collapse” of the sort
that Hobbes worried about (a worry quite reasonable in 1651). “The liberal tradition. . .
should turn its attentions to questions of symbolic and aesthetic value, such as what we
imagine ourselves to be, what symbols we demand from our government, and what we
find beautiful.”286 As Machiavelli realized in his republican writings (as against The
Prince), there is no reason why the aestheticization of politics should be a monopoly of
Bradford c. 1650, p. 34n.
Cite BV pp.
285 Santayana, Character, pp. 203-04.
286 Cowen 2004, p. ____.
283
284
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fascists of the extreme right or of the extreme left (thus Mussolini, who started as a socialist: “I am not a statesman, I am a mad poet”). We need to encourage also, Cowen
argues, what Hume called the “natural” (that is, sacred, spontaneous, private, passionate, and qualitative) virtues of courage and love, faith and hope in the arts. Cowen believes that beauty is a support for a free society (in his earlier books he has argued that
it is a product of a free society). “The developed Western democracies do not appear to
face imminent collapse or revolution, and at least temporarily they appear to have
solved the problem of political stability. The liberal tradition therefore should turn its
attention to . . . what we imagine ourselves to be, what symbols we demand from our
government, and what we find beautiful,” which is to say faith and hope, courage and
love, and elevated forms of justice and temperance, and even prudence.
A central example in the modern understanding of Hobbes is the so-called prisoner’s dilemma. The original story from early 1950s game theory here is: two prisoners
in an alleged conspiracy, Jack and Jill, are questioned by the police separately. What
should Jack do? If he keeps faith, and Jill in a distant cell does, too, they will both have
to set be free: no evidence. But if he keeps faith and Jill defects he gets 20 years. If on the
other hand he defects and Jill does, too, each gets 5 years—each gets time off for admitting to the conspiracy. Since Jack can't be sure of Jill's faithfulness, he defects, rationally. By choosing defection he assures that he worst that can happen to him, regardless of
what she does, is 5 years. If he keeps faith the worst that can happen to him is a lot
worse: 20 years. But she reasons the same way. So they both defect, rationally, and both
get five years, though if they had (irrationally) kept faith they could have gone free.
Prisoner's dilemmas litter the social landscape. For example, if all fishers restrained themselves a little the lake would restock. But each individual fisher has an
incentive to defect from social cooperation, and fish early and late. So cooperation
breaks down, and the lake is overfished. Prudence, argued Hobbes, would lead men in
a state of nature to defect from social arrangements. At least this is what he says in his
famous 13th chapter of Leviathan: “If a covenant be made wherein. . . the parties [must] .
. . trust one another . . . it is void.”
The Hobbes Problem has misled most serious thinkers about society since he
posed it. The exciting and endlessly formalizable problem is, Will a mass of unsocialized brutes form spontaneously a civil society? Will the prisoners and the fishers cooperate to save their collective selves? Hobbes’ answer was, No, not without a leviathan
state; otherwise one can expect society to be a war of all against all and the life of man,
etc., etc. Hundreds of other men have provided their own solutions.
The Hobbes Problem, when you think of it, is very peculiar. Its methodological error is taking the condition of mere nature, “before” all laws, as relevant to actual societies. It is the blackboard error. Why would it be interesting to know about the behavior
of a mass of unsocialized brutes, when every human being is in fact already socialized,
already under the eye in Smith’s terms of an Impartial Spectator? Such a doubt simply
does not occur to most men, such as the political scientist Robert Putnam or the economic historian Douglass North. Bernard Williams remarked that “If the test of what
men are really like is made, rather, of how men behave in conditions of great stress, dep-
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rivation, or scarcity (the test that Hobbes, in his picture of the state of nature, imposed),
one can only ask again, why would that be the test?”287
Women already know that humans, for example, are raised in families, and
therefore are already socialized. Yet men have been fixated on the Hobbes Problem,
without making the slightest progress in solving it, for three centuries now. From both
the left and the right it is considered clever among men to say, as they used to say in the
Party, “it is no accident that” interest reigns. As Annette Baier puts it, “preoccupation
with prisoner’s and prisoners’ dilemmas is a big boys’ game, and a pretty silly one
too.”288 Or Virginia Held: "By now, as many wounds have healed, I have come to see
not only that not all my life was or need be Hobbesian, but that perhaps little of life for
most people is best prescribed for in terms drawn from the contractualist tradition."289
Or Carol Rose: “The lapse of community may occur only infrequently in our everyday
lives, but this world of estrangement has had a robust life in the talk about politics and
economics since the seventeenth century.”290 In the men’s talk.
The men’s talk became particular strange in the so-called “separation of spheres”
around 1800. The political scientist Joan Tronto, for example, argues persuasively, that
at the level of ethical theory the late 18th-century saw a breaking up of a unified view, in
which the virtues of the household and the marketplace were the same. She assumes
with many others that the male realm of long-distance trade was the cause, since it was
without morality. It was a field of “unlimited economic acquisition,” she says, as
though greed were peculiar to modern capitalism.291 In fact trade always requires morality. It often turns out that people who write this way are depending on Karl Polanyi’s account of economic history.292 I don’t think Polanyi’s mistake is necessary for
Tronto’s own argument. It is not necessary for 18th-century long-distance trade to represent a qualitative break with earlier forms of economy, as it was not.
The separation of spheres did not make a great deal of sense, either as ethics or
as science. An example. A common property resource, such as a lake for fishing or a
park for picnicking, will always be overused if people are prudence-only, unspeaking
(or perhaps “unspeakable”) Max U types. The fish will be overharvested, to extinction.
The park will be strewn with trash, and the life of man will be solitary, poor, nasty,
brutish, and short. In 1994 three economists at the University of Indiana, Elinor
Ostrom, Roy Gardner, and James Walker, looked into the matter in full historical (“field
settings”) and experimental detail. As they note, Thomas Hobbes “justified the necessity of a Leviathan on the frailty of mere words” (Ostrom et al., 1994, p. 145). In his own
Williams 1972, p 8f.
Baier DDDD, “What Do Women Want?” p. 264.
289 Held 1993, p. 193.
290 Rose, Property and Persuasion, p. 225.
291 p. 27.
292 E.g. p. 32, the only citation to him, to be sure; she also relies on Habermas for historical proof
of the same assertion that the public became more public in the eighteenth century, p. 33; Habermas, like Polanyi, knows very little history.
287
288
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words, "the bonds of words are too weak to bridle men's ambition, avarice, anger, and
other passions, without the fear of some coercive power" (Hobbes, 1651/1914, p. 71).
But this is not so. In the world as it is people don't behave always as Max U, ignoring every virtue but the virtue of prudence. In Ostrom et al.'s amusingly stilted language, "Studies of repetitive common property resource situations in field settings show
that appropriators [e.g. fishers in a common lake] in many, but by no means all, settings
adopt cooperative strategies that enhance their joint strategies without the presence of
external enforcers" (p. 148). That is, in the real world, and even without a Leviathan
government making it happen, you find that people often cooperate in getting the most
out of a resource such as fish in a lake, instead of cheating for their personal gain and
ruining the resource for all.
Ostrom et al. tried it out in the laboratory, letting the experimental subjects talk
to each other, sometimes just one time and sometimes many times. They found that
when the players were not allowed to talk at all the joint rewards were low. But when
they talked, everything changed. The more the kids were allowed to talk the closer they
came to achieving the best payoff for the group. The talking players certainly never
adopted what is known in game theory as the "trigger" strategy, that is, punishing defectors by initiating a war of all against all. As someone put it, "Yeah, someone is cheating [he didn't know who it was], but that is the best we can do" (p. 156). In another experiment someone said, "Go for a free-for-all? Shucks, no, we all lose" (p. 159). The
“shucks” makes one worry that the choice of genial Hoosiers as experimental subjects is
biasing the result; but such results have for twenty years been pouring out of all the
economic laboratories, such as those in fifteen small-scale societies worldwide studied
by Heinrich et al. in 2004. Time to take the science seriously.
And communication, whether free or costly---Ostrom et al. charged the players
money to engage in periods of negotiation---radically increased the amount of cooperation. True, the "experiments should not be interpreted as supporting arguments that
communication alone is sufficient to overcome repeated dilemma problems in general. .
. . [Players] might well want to add the sword to a covenant" (p. 169). That is, the pious
hope that "better communication" can solve all the world's problems---Darfur, for example, or Kosovo---is often vain. But the opposite conclusion is not sustainable either--that talk is merely "cheap" and language does not matter for economic outcomes in foreign relations or in marketplaces.
Prudence doesn’t work as politics; nor does it work as economic history---this
contrary to my former beliefs. It is language, and the ethical commitments of an openended Oakeshottian conversation that make the modern world. Rationality (against
Weber) is not our lives. The decades around 1700 in Europe saw an ethical turn, a business civilization, bourgeois virtues, taking place in language.
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Chapter 16:
Prudence-Only is Refuted
by Experience and Experiment
To accept such an absurd mental experiment as the prisoner’s dilemma as the only frame for answering all questions about why societies hang together is, in other
words, a scientific mistake. It depends, as the Voting Paradox and the Hobbes Problem
do, on a Max-U, prudence-only premise which is commonly contradicted by the facts.
People do not always cooperate, true. But neither do they always defect, which is what the
prisoner's dilemma implies, strictly, always. The life of man even without subordination to a leviathan state is only sometimes a state of war. Often enough, as Hobbes recognized, the very leviathan was the cause of the war.
In actual prisoner’s-dilemma experiments men and women cooperate far above
the level predicted by the prudence-only model. A revealing feature of the experiments
is that the only people who do not cooperate at such levels, and who do approach the
trained Benthamite economist’s level of defection are . . . trained Benthamite economists.293 Another revealing feature is that if the experiments allow the participants to
speak to each other the percentage of cooperation rather than defection shoots up. Language (as Adam Smith noted) is the great social binder.
The “ultimatum game” is another widely used test of prudence-only. One of the
parties is endowed with (say) $10 under the following conditions: he is to propose to
the other player a split of the $10 between them, such as $5 each, or more selfishly $9.99
to himself and 1 cent to the other, or whatever. The other player must without discussion accept or reject the offer. If she rejects it, neither party gets anything at all. The game
is society in a nutshell. If we will but cooperate with each other we will all gain, as we
do under the gigantic cooperative game of modern market capitalism. The prudenceonly character, Max U, will of course offer to give the other player only 1 cent, since he
has not an ounce of justice or love in his makeup. If his companion Maxine U is also a
prudence-only character, she will count herself lucky to get even the 1 cent. Both are
better off under Max’s unjust offer, so both if motivated by prudence-only should be
satisfied.
But they aren’t. In actual experiments people routinely make offers closer to 4060 (the average outcome) or even 50-50 (the most common outcome). That is, justice
matters, and people regard justice as equality. No one will be surprised, by the way,
that women in such experiments are notably fairer than men; nor that allowing the
players to talk to each other dramatically reduces inegalitarian offers. In an inegalitarian society, such as England in 1600 or Japan in 1867 (or even in 1941), a Proposer who
was the Duke of Norfolk or the daimyo Satsuma would presume that he was due in jus293
Maxwell and Ames 1981. Cite Francesco’s PhD thesis. Erasmus University,
2008
155
tice a large share, say 90%, and the peasant Acceptor, too, would presume that he
should justly, humbly accept his 10%. But no one except a lunatic of prudence would
suppose in any society that going all the way to $9.99 and 1 cent is going to evoke an
accepting attitude. Yet exactly such lunacy is the prestigious theory in modern economics.
The criticism of prudence-only does not imply that the virtue of prudence is a
nullity, that justice-only or love-only reign instead. The loony version of prudence is
what is being criticized, the version that says it operates without any other virtues, always.
If you see a $20 bill on the floor you will, unless you are Bill Gates, stoop to pick
it up. If you see a penny you probably will not. People attend to prudence, and they
must attend to it if they are to flourish in a fallen world. This is obvious. Prudence is a
virtue, and widely practiced, even if modified by other virtues---modified by a proper
self-esteem, for example, that resists picking up the penny; or a love that resists charging ones children for lunch. Only the modified, “satisficing” approximation to prudence makes much sense anyway, considering the limited powers of calculation in humans and, especially, their attention to other virtues, such as courage and love and
faith.
A modified prudence suffices for most economic arguments, and some of the
most surprising. Economists have contributed mightily to social theory by working out
the implications of an approximate, $20-bill prudence. Their models are often expressed as exactly prudence-only, and the mathematization of economic theory, and especially the adoption of the theorem-and-proof values of the Department of Mathematics as against the simulation-and-approximation values of the Department of Physics,
has encouraged such unnecessary exactitude.294 But approximate prudence does 99% of
the analytic work. For example, you might think that a scheme in a famine to buy bread
and sell it to the poor at subsidized prices would benefit the poor. No, said the Irish
economist Mountiford Longfield (1802-1884), using an approximate, $20-prudence. The
scarce bread has somehow to be allocated. So buying it in order to sell it cheap would
merely double the market price, leaving the price at which it is then sold to the poor unchanged. Or again, you might think that selling admission to the King Tut exhibit at the
Field Museum at a price that results in long lines would be good for the customers,
since the price is low. No, any economist would say. You are missing the value of the
queuing time, which in equilibrium must, even for moderately prudent customers, become roughly equal the difference between the market-clearing price and the too-low
actual price. And so on for hundreds of more or less startling pages of books on economics.295
So real people do pay attention to approximate prudence. But the experimental
results and the ordinary experience of life shows that they regard temperance, courage,
McCloskey 1994, pp. 127-154.
For approximately 1000 worked examples of the consequences of approximate prudence, consult McCloskey 1984.
294
295
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justice, love, hope, and faith, too. Christina Bicchieri wrote in DDDD a devastating survey. . . . Crushing evidence from game theory, Herb Gintis, etc.
And the experiments, and common experience if judged free of anti-bourgeois
prejudice, suggests that market societies are more, not less, concerned with nonprudential considerations. Jean Ensminger, summarizing experimental results since
1978, writes that “something appears to trigger fair-mindedness in association with exposure to market institutions. . . . Among those selling either their labor or their goods,
there may be a higher premium placed on reputation, and . . . one way of signaling a
good reputation is to behave fair-mindedly. Eventually, this norm appears to be internalized.”296 Yes. But one sees this behavior in playgrounds, well before much selling or
buying. The anthropologist NNNN Fiske regards fair-mindedness as an early developmental stage in children, to be followed at age 8 or so by an acknowledgement of exchange value.297 A society of adults taught to be fair-minded may then teach their children, who henceforth take it as a faithful habit. But this doesn’t appear to explain the
playground. Joseph Henrich writes in the same volume (edited by him) of experiments
in non-market societies: “Those who do not customarily deal with strangers in mutually
advantageous ways may be more likely to treat anonymous interactions as hostile,
threatening, or occasions for opportunistic pursuit of self-interest.”298
And the evidence is overwhelming that they do. Against it is the custom of hospitality to strangers that so startles city people venturing into non-city societies. Genesis 18:1-15 tells of Abraham’s warm hospitality to the three strangers, one of whom
turns out to be Yahweh Himself. In the folk tales such hospitality is commonly rewarded---here by the birth of Isaac---as though to encourage it in societies without Holiday
Inns. The words for “guest” and “enemy” in Latin both derive from Indo-European
*ghostis, “stranger,” from which comes English “guest.” The uneasiness is echoed in the
double meaning of “host” as “one who treats guests,” derived from Latin hospes, and as
“a large army,” derived from the related Latin hostis. But the explicitness of the custom,
and the terrible punishments in the folk tales for its violation (Jack in the Beanstalk is
one example), shows how egregious is any consideration for strangers.
The job in modern ethics is to distinguished the other virtues from prudence.
You get no ethical credit for doing well by doing good. Machiavelli thought it likely
that “corruption” was the natural state, that is, the elevation of a selfish prudence over
justice or love in a republic. The political scientist James Q. Wilson, who during the
1950s and 1960s was well known for being eager to bring considerations of “rational
choice theory” into his field, for example, starts his chapter on duty (I would call it
faith) by arguing that “we usually tell the truth and keep our promises because it is useful to do so” (1993, p. 99). His argument is necessary to be credible in the prudenceworshipping culture we have had in English since the 18th century. The modern jibe--and it does seem to be modern, something new in the past couple of centuries in the
West---is to uncover a selfish interest in every good deed. Remember the historians’
Ensminger , p. 33
cite
298 Henrich DDDD, p. 38.
296
297
157
suspicion about the motives for charity in 17th-century Holland or 18th-century England.
Having made the modern concession to ethical cynicism Wilson ventures that “sometimes,” even “often,” we “may” evince faith against what prudence would call for.
Hume skewered the argument, so common in Bentham and Benthamites, that if
one is found to get some pleasure for a virtuous act, then mere pleasure must be the only
motivation. Such philosophers “found, that every act of virtue or friendship was attended with a secret pleasure; whence they concluded, that friendship and virtue could
not be disinterested. But the fallacy of this is obvious. The virtuous sentiment or passion produces the pleasure, and does not arise from it. I feel a pleasure in doing good to
my friend, because I love him; but do not love him for the sake of that pleasure.”299 If a
mother gets some entertainment from her child, then she must be motivated entirely by
the entertainment value, right? No, not right. The argument is widespread among social philosophers who regard Ockam’s Razor as the only principle of science worth attending to: as Hume remarked elsewhere, it seems “to have proceeded entirely from
that love of simplicity which has been the source of so much false reasoning in philosophy.”300
Wilson is in his maturer years eloquent on the subject. “Hiding behind what
Hervey Cleckley called ‘the mask of sanity,’ the psychopath is the extreme case of the
nonsocial personality,” that is, someone motivated by prudence only. “If man were
simply the pure calculator that some economists and game theorists imagine, this is
what he would be.”301
Nor does biology rescue the “Hobbesian” hypothesis of selfishness, as many recent enthusiasts for evolutionary psychology and sociobiology have believed it does.
For there is a biology of love as well of prudence. Robert Axelrod, relying on the work
of the British sociologist Tony Ashworth, recounts the birth of ethics in the trenches of
World War I. A German unit from Saxony apologized loudly to a British unit facing it
when (as the Saxon spokesman put it) “that damned Prussian artillery” back behind the
front lines lobbed a shell into the British lines during an informal truce. “The cooperative [and vocal] exchanges of mutual restraint,” writes Axelrod, “tended to make the
two sides care about each other’s welfare.” Prudence-only breaks down when the payoffs to prudence include love: “the very experience of sustained mutual cooperation altered the payoffs of the players, making mutual cooperation even more valued than it
was before.”302 Axelrod draws the moral: “behavior and outcomes. . . affected preferences.”
A dog, such as my own, or yours, may have a predisposition to love from a prudent biological instinct for survival. The current theory is that dogs evolved themselves, so to speak, as genial scavengers in Chinese camps of hunter-gatherers c. 12,000
B.C. A modern dog may then, if handled kindly and given tactically sound treats of Li299
300
301
302
Hume, Essays, XI, “Of the Dignity or Meanness of Human Nature,” para. 10,
Hume, Principles of Morals, Appendix II, “Self-Love,” p. 250 of 1771 ed., 298
of OUP 1975 ed.
Wilson 1993, p. 107.
Axelrod p. 85.
158
va-Snaps, come to love her particular mistress. That is: love can be entirely “selfishly”
generated, by a selfish gene in Canis familiaris or by self-preserving ingratiation by a
particular dog or by Pavlovian response evoked by a mistress running an experiment in
behaviorism. Some behavior of Canis familiaris or my dog, named Will Shakespeare, can
be explained, then, as prudence only in the narrow sense.
But once an actual dog (Willie, say) has “selfishly” acquired the character of loving, say, Deirdre, there is no longer any point in describing his behavior as selfish, run
by prudence only. To express the point in the high-school version of an antique positivism in which economists find comfort, prudence will not “predict well.” Willie will
now sacrifice his life for his mistress. He will tolerate any abuse. He simply loves. He
regards his mistress to some degree as sacred, though limited by the doggy absence of
language. An actual dog, Greyfriars' Bobby, a Skye terrier, so loved John that when
John died the dog guarded the tomb in Greyfriars Kirkyard in Edinburgh for fourteen
years, until 1872, when he himself died. Such loving parts of my Willie’s behavior will
not be explicable as rational or selfish. In other words, Willie loves.
I had a student who during his service in the Swedish army was being taught
with other recruits how to activate large, modern grenades and then throw them over a
little earthen hill, where they exploded harmlessly. Alongside every recruit, furthermore, stood a wide, upright steel pipe with a cave under its earth-side end, where you
could drop the live grenade if for some reason you suddenly didn’t want to throw it
over the hill. The sergeant in charge had warned the recruits to take off any rings, to
prevent a live grenade getting entangled in the ring, becoming unthrowable and killing
everybody.
The worst happened: a recruit had not taken off his wedding ring, had pulled the
pin on the grenade, and only then had found to his horror that he couldn’t get rid of it,
entangled in the ring. The sergeant leapt to the side of the terrified young man, seized
the arm with the about-to-explode grenade held fast, and plunged the recruit’s arm and
of course his own into the nearest pipe. Not a moment too soon. Both men’s arms were
blown off. But a dozen lives were saved.
Rational behavior, prudence-only style, or not? If the sergeant had had hour or
so to work out the costs and benefits on a rough balance sheet, with the help of an investment counselor and a personnel specialist from the Swedish Ministry of Defense at
hand, yes, it could perhaps be counted rational. He would lose his arm but gain lasting
glory. His career would flourish. Or at least his pension would be safe. But in the actual event no one believes that a prudence-only calculation “explains” his behavior. He
did what he did because he was a trained soldier, who had made himself and been
made by others to have a certain character, so that in the crisis he would act well. It is a
tradition in the Swedish army back to Gustavus Adolphus.
The sergeant’s training might have been “rational.” His action was not. We
might say the Swedish sergeant acted “instinctively,” but that is a loose a way of talking. Would you yourself do such a thing “instinctively”? He acted out of his socially
formed, sacred identity as a non-commissioned officer responsible for other soldiers,
instantly, unreflectively, uncalculatingly, just as he had to. Remember Lord Jim in Con-
159
rad’s novel, who did not fulfill his life’s training as a merchant marine officer, deserting
an apparently sinking boatload of pilgrims bound for Mecca.
And even “irrational” training can create a character of use, as medical-school
deans and hospital administrators seem to believe in subjecting their students and residents to 24-hour shifts. Maurice of Nassau, who commanded the Dutch wars in the first
decades of the Republic, invented the modern system of drill in musket armies. He was
inspired by classical models (he was an educated man: thus did Erasmian literacy pay
off on the battlefield). When his drills proved successful in defending the Dutch Republic against mighty Spain the drills were adopted by everyone in Europe with any sense,
as for example Gustavus Adolphus, and Louis XIV’s Lieutenant Colonel “Martinet” and
Cromwell’s New Model army and the armies of little Prussia coming into her own. The
apparently bizarre parade-ground drill in fact instilled a character of instant obedience
far from the parade. When told in the face of onrushing cavalry or man-crushing cannon balls to stand and load their muskets (following the fully 42 orders into which
Maurice broke the whole) they would follow orders strictly, contrary to every prudent
passion.303
As Albert Hirschman notes, vexation about “the imperviousness of the passions
to reason” justified a good deal of cynicism about the virtues in the 17th and 18th centuries.304 Perhaps that is why the virtues dropped out of favor. A Machiavellian, virtùonly view seemed only common sense in a Europe willing to burn and pillage for a doctrine of justification by faith in the love of Jesus Christ alone. Preaching the virtues has
since then been accounted naïve, if not pernicious. It is the passions and the interests
we must study. Western Europeans then were fixated on “the passions” in the way
they were 1890-1945 on “race” or 1910-70 on the “unconscious.”
Yet among our passions is a passion for the Good. This is what is missing in the
Hirschman view. Passions offset by prudence is the world of Machiavelli, Hobbes, and
Mandeville. They are certainly part of the story of intellectual Europe n the transition to
a business-dominated civilization. But the English moralists and the Scottish Enlightenment argued that is prudence within other virtues and vices is the better model. John
Dwyer, for example, has argued that the Scottish moralists “attempted to mold modern
yet moral social leaders who could assert the values of community over the selfish interests of the market place.”305
Like John Mueller and Philippa Foot and James Q. Wilson, I write my own book
“to help people recover the confidence with which they once spoke about virtue and
morality.”306 All these writers have complained, as Wilson puts it, about the strange
modern “effort to talk ourselves out of having a moral sense.”307 Humean skepticism
about ought/is has long since been exploded, but you will find economists ignorant of
philosophy expounding it as fresh and decisive news. The anthropologists’ discovery
303
304
305
306
307
McNeill 1982, pp. 125-131.
Hirschman, p. 24.
p. 192, the last line of the book.
Wilson 1993, p. vii.; cite Mueller and Foot.
Wilson, p. ix.
160
that not everyone dresses for dinner and the psychologists’ claim that much of what we
do has subconscious motivations are too easily taken as good reasons to dump the virtues, supplementing the cruder and older argument, still lively, based on disdain for
organized religion (because the priests are hypocritical about virtues, we lay people
have a license). Some modern businesspeople---and more plainly the artists and intellectuals who talk of modern businesspeople---have tried to talk themselves out of having a moral sense. A rhetoric of savvy and cynical prudence has crowded out the other
virtues.
Especially in business. Like Wilson and especially like John Mueller I think that
in fact business has been founded on ethics. But the modern temper has denied the
foundation. The results have been a frank amoralism that is unnecessary for business;
indeed, bad for it; and anyway bad for businesspeople, which is what most of us are in
these latter days. As Adam Smith put it, complaining of an early contributor to the
dissing of ethics, to imagine that the world runs on prudence only “taught that vice
which arose from other causes to appear with more effrontery, and to avow the corruption of its motives with a profligate audaciousness.”308 And as the late Robert Solomon
(well named), who wrote a good deal on the matter, says about business ethics, “the
philosophical myth that has grown almost cancerous in many business circles, the neoHobbesian view that ‘it’s a jungle out there’ and ‘it’s every man for himself,’ is the direct
denial of the Aristotelian view that we are all . . . members of a community.”309 Participation in a polis or a market or a corporation, Solomon argues, results in an “enlargement of the self as a thoroughly social self and not an isolated Hobbesian or Lockean
self”[p. 257], or as Leibnitz put it at the time, a “monad.” We are in fact, said the wise
Scots, poly-ads, or polis-ads, members of families or other loving groups.
*
*
*
*
A modern case in point is a famous article by the dear departed Milton Friedman
that is supposed to have argued that the only responsibility of the manager of a corporation is to maximize the value of the stock held by its owners. I have noted elsewhere
that Friedman is misread, and that the actual sentence in which he asserts this duty
ends with a clause "while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom."310 But anyway Friedman has
been read as prudence only, to which the philosopher Daniel Hausman has offered a
devastating criticism. If Max U is supposed to characterize managers, it is "mysterious,"
Hausman notes, how they came to be so faithfully subordinated to the owners. "Just
how the internal structure of a firm is supposed to insure that a set of knaves acts so as
to maximize the net returns for the firm is deeply mysterious" [p. 75]. Friedman is here
said to be preaching virtue—a particularly narrow version of virtue, to be sure, but both
preaching and a virtue. It is inconsistent to claim that preaching virtue within corpora308
309
310
Smith 1790, p. 313.
Business as a Humanity 1994, quoted in Heath, p. 255.
Friedman, " Social Responsibility of Business," 1970, p 33.
161
tions is bad if you say it is bad for managers to increase their personal prestige in a
community, say, by giving away the shareholders’ money to local charities, or taking
the corporation off on programs of social responsibility with which the shareholders do
not agree.311
* * * *
A philosophy student of mine, Clemens Hirsch, has challenged me to give
an account of doves facing at least some hawks. He refers to the toy “biological”
model in game theory in which some people are doves (that is, cooperators) but
others are hawks who eat doves (that is, takers of advantage). In a world with no
doves, the hawks would starve---so that can’t be an equilibrium. In a world with
only a few hawks the population of hawks would grow, so that can’t be an equilibrium, either. Some sort of balance arises.
But experiments and experience suggest that dovish behavior often results
in induced dovish behavior by the other. And I would claim that the mere, incessant chatter since Machiavelli about hawks has damaged such cooperation. Yet
Hirsch is surely correct that we need to ask “How does the virtuous agent Max V
[Hirsch’s witticism: “maximum Virtue,’ as contrasted with “maximum Utility”]
behave in interactions with less virtuous agents? How does max V behave in an
interaction with Max U, somebody who will take every opportunity to gain
short-term [or I would say, long-term] advantage?”312 The answer I think lies in
the development of what Pocock calls “manners” and I would call “bourgeois
virtues,” in England, 1600-1776.
I make the same point in McCloskey, The Bourgeois Virtues 2006, p. 320-322.
312 {Hirsch 2006 “Can Max U and Max V Ever Become Good Neighbors?” Unpublished
paper, Rotterdam: EIPE.], p. 4.
311
162
Chapter 17:
The Left Should Acknowledge the Virtues
Martha Nussbaum’s recent book, Frontiers of Justice: Disability, Nationality, Species
Membership (2006), attempts to add the love of others to the accepted axioms of political
philosophy. She criticizes on this count the strictly Hobbesian/Gauthieresque contractarian's assumption of prudence only; or the Lockean/Rawlsian contractarian's prudence-with-a-version-of-justice. In a brief, bumper sticker version of a complicated project, Nussbaum’s book is about love-adding: bringing our care for others in at the start.
She says that such a supplement will preserve the contractarian program in political
philosophy—the masculine "strength" and parsimony of which she sometimes admires—yet yield a civil society in which the severely handicapped, the old, the foreigners in poor countries, the animals will be treated with appropriate dignity. I admire the
project.
Throughout the book she defers to the late John Rawls, whom she evidently
loved and esteemed. In criticizing David Gauthier's strict, economistic, prudence-only
contractarianism, however, she makes a point which undermines Rawls and is I think
very important in itself. I want to call it the Nussbaum Lemma:
The Nussbaum Lemma
I think it implausible [she writes] to suppose that one can extract justice
from a starting point that does not include it in some form, and I believe
that the purely prudential starting point is likely to lead in a direction that
is simply different from the direction we would take if we focused on ethical norms from the start (p. 57).
The Nussbaum Lemma is profoundly right, and it is—as she shows in her book—
devastating to the project since 1651 of pulling a just rabbit out of a purely prudential
hat. You can’t get virtue J from a starting point consisting only of virtue P. Virtue J has
to be in from the start. You have to put the rabbits into the hat if you are going to pull
them out.
A technical implication, and her point in effect throughout—although as I
say she bows respectfully towards Rawls—is that the Nussbaum Lemma applies also to
Rawls' argument. Prudence in Rawls is supplemented by the justice-imitating features
of the Veil of Ignorance, similar to the Veil of Uncertainty in James Buchanan and Gordon Tullock.313 But as can be proven on a blackboard or in actual societies depending
on ones intellectual tastes, it is implausible to suppose that one can extract full justice
towards the handicapped, the globally poor, or the animals from a starting point that
does not include love of others and full justice already, at the start, in some veiled form
if you wish. That is Nussbaum’s theme.
313
James Buchanan and Gordon Tullock, The Calculus of Consent: Logical Foundations of Constitutional Democracy Ann Arbor: University of Michigan
Press, 1962.
163
Another and less friendly technical implication is that the Nussbaum Lemma applies also to her own project in the book. You can't stop, I say, with prudence, justice,
and love of others. It is implausible to suppose that one can extract faith, temperance,
hope, courage, the fullness of love (including love of nature, say, or of science, or of
God), and other qualities constituting as I have claimed human flourishing from a starting point that does not, in Nussbaum’s words, “include them in some form.” And it
seems likely that attempting to do so will lead in a direction that is simply different
from the direction we would take if we focused on ethical norms from the start.
What of it? This: political and economic philosophy needs to be done with all
seven of the virtues, not merely with some cleverly axiomatized small selection. My
point, and hers if she would but admit it, is that to characterize people with one or another of the boy’s-own “models” said to suffice for theories of justice or politics will not
do. Characterizing humans as Prudent Only, or even as prudent and just, with love of
others, will not do. People also have identities (faith), and projects (hope), for which
they need courage and temperance, those self-disciplining virtues, and they all have
some version of transcendent love—for God, the traditional object, though as I say science or humanity or the revolution or the environment or art have provided modern substitutes.
The usual reply is, as Nussbaum says, that political theory is only concerned
with the minimum conditions for a peaceful society. The other virtues are supplementary—thus the Humean terminology of artificial and natural. But the reply does not
appear to work. The artificial virtues often need the protection, so to speak, of the natural virtues. After all, that is Nussbaum’s point, that a society without love of handicapped children or the foreign poor is flawed. Often enough the flaw causes the collapse of the artificial virtues themselves, as when an unloving contempt for animals
brutalizes a society in its attitudes towards human justice. Likewise, without what
James Buchanan calls an “ethic of constitutional citizenship,” a constitution originating
from the selected, even cleverly axiomatized virtues of prudence and justice will not
survive. That has been the theme of much of Buchanan’s work, especially since the
1960s. The implication is that the virtues of faith and courage and hope must somehow
arise to protect the constitution of liberty.
The following repeats some a passage in The Bourgeois Virtues: delete or
summarize in a way that makes it useful. Beyond the “protective,” ancillary role of
the natural virtues in sustaining even the minimum conditions for a peaceful society,
the entire set of seven virtues is necessary to get the project going in the first place. Full
human beings—not saints, but people in possession of their own whacky and personal
versions of all seven—are the only beings interested in forming a society. The zoon politikon has much more than prudence, justice, and a secular version of love.
In any case, suppose you have in mind to make fully flourishing human being
(or all living beings, if you include the animals and even the trees). If this is your end,
namely, a society consisting of such beings, then your social-scientific means must as
Nussbaum says "focus on ethical norms from the start." You have to put the rabbits into
the hat. In order to have a society that shows prudence, justice, love, faith, hope, cour-
164
age, and temperance you need to arrange to have people who are . . . . prudent, just,
loving, faithful, hopeful, courageous, and temperate "from the start."
The "start” is called "childhood," mostly ignored in Western political philosophy
(it is not, by the way, in the Confucian tradition). A political/ economic philosophy
needs to focus on how we get in the first place the people who are prudent, just, loving,
etc., and who therefore would care about the capabilities of good health, emotional attachment, affiliation, etc., or about the appropriate constitutional changes to obviate
prisoners’ dilemmas, or about the categorical imperative, or about the greatest happiness. This is what feminist economics has been saying now for two decades, and what
also comes out of some development [note the word] economics, and even, reluctantly
but persistently, out of such unpromising-looking fields as game theory, experimental
economics, behavioral economics, the new institutionalism, and constitutional political
economy.
Put this a new way: What is required for any ethics is, in other words, a conscientious moral agent, a virtuous person. Virtuous: namely, having the seven virtues
in some idiosyncratic combination. Kant himself said so. In his Reflections on Anthropology he praised “the man who goes to the root of things,” and who looks at them “not
just from his own point of view but from that of the community,” which is to say (wrote
Kant), der Unpartheyische Zuschauer, which as it happens is precisely the German translation of Adam Smith’s ideal character from whom at least the artificial virtues are said to
flow, the Impartial Spectator.314 Adam Smith’s system in The Theory of Moral Sentiments
was the last major statement of virtue ethics before its recent revival. Especially in Part
VI he reduced good behavior to five of the seven virtues: prudence, justice, love (“benevolence”), courage (“fortitude”), and temperance (the last two being “selfcommand”).315 Hope and faith are absent, as monkish, but the ideal bourgeois he praises in the early pages of Part VI has them anyway in secular form, as Smith did in his
own life.
Ditto and shortened By admitting that der Unpartheyische Zuschauer begins his
system, Kant undermines it, since the impartial spectator is not derivable from maxims.
Kant’s system is supposed to ground everything in maxims that a rational being would
necessarily follow. It doesn't. What Peter Berkowitz said about Kant's political philosophy could also be said of his ethical philosophy, that he "makes practical concessions
to virtue and devises stratagems by which virtue, having been formally expelled from
politics, is brought back in through the side door."316 Or as Harry Frankfurt puts it,
314
315
316
The passage is noted and the identification with Smith asserted by a German
translator in 1926 of The Theory of Moral Sentiments, Walther Eckstein,
quoted in Raphael and Macfie, eds., “Introduction,” to Theory ed. of 1976,
p. 31.
Smith 1759 1790, The Theory of Moral Sentiments, Part VI, section iii, para. 1-3 p.
236 of the Oxford edition, 1976.
Berkowitz 1999, "Introduction," at http://www.pupress. princeton.edu/
chapters/ i6565.html.
165
There can be no well-ordered inquiry into the question of how one has to
reason to live [such as Kant's], because the prior question of how to identify and to evaluate the reasons that are pertinent [that is, those favored
by a conscientious moral agent, the Impartial Spectator] in deciding how
one should live cannot be settled until it has first been settled how one
should live. . . . The pan-rationalist fantasy of demonstrating from the
ground up how we have most reason to live is incoherent and must be
abandoned.317
*
*
*
*
You might well say to all this philosophical heavy lifting, Valley-Girl style,
"Duh! We need to raise children with ethical values? People need to be good already in
order to want to be good? Double duh!" I agree. But the intellectual tradition of economists and calculators does not wish to acknowledge—especially at the start—all the
virtues in a flourishing being. It wants to start simply, with a nearly empty hat, such as
“Pareto optimality,” and then pull from it a complex ethical world. It wants to reduce
the virtues to one, ideally the virtue of prudence, and derive the other virtues, such as a
just polity, from the prudence. It does not want to talk about how we arrange to have
on the scene in the first place an ethical actor who by reason of her upbringing or her
ongoing ethical reflection wishes the greatest happiness for the greatest number, or the
application of the categorical imperative, or the following of constitutional instructions
from behind a veil of ignorance.
It hasn’t worked, not at all, this boy’s game, and it is time that economists and
political theorists admitted so. So-called "welfare economics" has recently shown some
faint stirrings of complexity in ethical thought, as in the works of Sen, and more in the
works of younger economists and philosophers inspired by his forays. But most academic economists continue working the magician's hat. The hat does not contain a living theory of moral sentiments. Indeed, instead of a nice set of seven cuddly rabbits,
the economists have supplied the hat, I have noted in The Bourgeois Virtues, with a
large, Victorian, utilitarian parrot, stuffed and mounted and fitted with marble eye.
Time to give the dead parrot back to the pet store—though the economist/salesman
will no doubt keep on insisting that the utilitarian parrot is actually alive, that Pareto
optimality will suffice, that though the parrot looks dead, kapot, over, a former parrot,
he is merely pining for the fjords.
Amartya Sen and Martha Nussbaum have long advocated a minimum standard
of human flourishing, that is, capabilities. It is a rich and Aristotelian list:
317
Harry Frankfurt, The Reasons of Love Princeton: Princeton University Press,
2004, pp. 26, 28.
166
How Nussbaum’s List of Capabilities
Lies Down on the Seven Virtues
Not dying prematurely
Justice
Good health
Justice, temperance
Secure against assault
Justice,
Use of imagination
Hope, justice, courage
Emotional attachment
Love, faith
Practical reason
Prudence, hope, faith
Affiliation
Love, justice
Love of other species
Faith, temperance
Play
Courage, hope
Political and economic rights
Justice
Source: Nussbaum 2006, pp. 76-78
Justice figures in so many of the capabilities because Nussbaum wants them to be liberal-political, that is, agreeable to all, the result of an “overlapping consensus,” as the liberal tradition and Nussbaum express it. Such artifice will require of course an otherrespecting virtue named something like “justice.”
But notice again: in order to have the disposition to work for this or that capability one has to have at the start the virtues to wish to do so. It is not enough to rely on prudence or justice or even love of others. Adam Smith writes in a well-known passage
that if love for our fellow humans was all we had to depend on, then the extermination
of the Chinese would trouble us less, really, than the loss of a little finger.318 It takes a
sense of abstract propriety, he argued, a virtue separate from love and not translatable
into it, to want to give a damn for a foreign people whom you have never seen and
whom you can never love. The moral sentiment—I would call it a sense of justice,
though Smith would not—impels the man within to scold a self that is so very selfish as
to save the finger rather than the entire race of Chinese. "What is it," he asks, “which
prompts the generous upon all occasions and the mean upon many to sacrifice their
own interests to the greater interests of others? It is not. . . that feeble spark of benevolence. . . . It is reason, principle, conscience, the inhabitant of the breast. . . . The natural
misrepresentations of self-love can be corrected only by the eye of this impartial spectator.”319
But the same can be said of the other virtues. Take James Buchanan himself as a
case in point. It takes a character of hope to have an interest in constitutional reform. It
takes a character of faith to worry about the corruptions of Me-ism in American society.
It takes a character of courage to stand against the Northeastern establishment in intellectual life. Characters—not wind-up toys of prudence only, or even prudence with a
318
319
Smith, Moral Sentiments, 1759 1790, Part III, Chp. iii, para. 4, p. 136. Compare
Rousseau Political Economy, 1755, p. 121.
Smith, Wealth, 1776, III.3.5, p. 137. I wish he hadn't said "reason," which
makes the passage sound Kantian.
167
version of justice—should be in the theory at the start. The hat needs to be full, full of
rabbits or parrots as you wish, but anyway representing all seven of the virtues.
Economics since Bentham, and in sharp opposition to Smith, has been by contrast the pure theory of prudence. Econowannabes like political scientists and political
theorists are thrilled when economists suggest that all you need is prudence. If the theorists find they can't get away with prudence only they add a mechanism in Rawlsian
style to imitate justice. If they find they can't get away with that, they add love of others, as Nussbaum does.
I say that all this "if they can't get away with" suggests, just as the Nussbaum
Lemma avers, that the project is mistaken. It is not a good idea to start with a parsimonious (i.e. Platonic) description of human beings. There is no "strength" in Ockham's
Razor. Essentia non sunt multiplicanda praeter necessitatem: Essences must not
be multiplied more than is necessary. All right, yes, I agree: not more than is necessary.
But the Seven Virtues, or some other rich, Aristotelian description of the flourishing life,
are each of them necessary. To get der Unpartheyische Zuschauer, to get those capabilities,
to get a minimally peaceful community, to get a constitution under which we want to
live, to get people willing to agree to the outcomes of markets, to get people willing to
agree that efficiency is a powerful ethical criterion, we need humans, not wind-up toys
or stuffed parrots.
A Virtue-Ethical Theorem seems to follow from Nussbaum’s Lemma. Looking at
the matter in the Nussbaum-Lemma way undermines invisible-hand arguments, which have so
fascinated us since Mandeville. They do not entirely undermine them. I am not suggesting that we abandon the insights we gain from thinking of ethics at two levels, the
individual and the society, and asking how the one level relates to the other.320 Relating
one level to the other is an important merit of the Virginia School of constitutional political economy—though the School tends to want to get along on prudence only. As
Smith said in The Theory of Moral Sentiments, to start where Mandeville starts, with selfish prudence only, will not produce humans.321
Oddly, the so-called Theorem reinstates an older and simpler view of how to go
about political philosophy. The wider our list of virtues for flourishing, the wider our
list of capabilities, the more rabbits, parrots, virtues we have to put into the hat at the
outset, the stronger is the Nussbaum Lemma. And therefore the more and more implausible does it become that some "immensely simple theory" (as Bernard Williams
once put it) will turn out to give a livable human society, as though from an invisible
hand.322 Or a hat.
In other words, the civic republican notion that the way to have a good society is
to arrange somehow to have a bunch of good people—which in the light of invisible
hand liberalism seems insufficiently social scientific —turns out to be much more plausible and scientific than we liberals thought. My “theorem” is that the more seriously
320
321
322
I myself need to do it more than I have; and will in the next book on the
bourgeois virtues.
Smith, Theory of Moral Sentiments, VII, ii, 4.6-13, pp. 308-313 of Oxford edition.
Williams, Ethics 1985, pp. 197, 127.
168
we take full human flourishing the more true becomes Orwell’s apology for Dickens’
ethic: “`If men would behave decently the world would be decent’ is not such a platitude as it sounds.”323
In still other words, an economics that takes human flourishing seriously should
start with the virtues —and finish with them, too, since by the Nussbaum Lemma they
end up pretty much the same, and that is what we want in humans. To put it in terms that
begin to edge towards Virginia Political Economy, the seven virtues are what a flourishing individual wants for herself; it is what she chooses, when she has the capability to
choose.
All the necessary virtues. Not of course prudence only in Benthamite style.
Nussbaum and Buchanan and I start from that anti-utilitarian assumption. But also not
prudence and a version of justice by themselves (Rawls); or prudence and another version of justice (Buchanan and Tullock); or prudence, a version of justice, and the human
side of love (Nussbaum). It is humans who make and honor constitutions, not partial
monsters. All seven virtues need to be there at the start, which is to say there in the
adults who participate in politics and society and the economy: prudence, to be sure;
and justice; and love of others; but also temperance, courage, hope, faith, and love for a
transcendent such as the Good or, with one letter left off, God.
There is no point to the modern (post Machiavellian/Hobbesian) reduction of the
theoretical project to a simple few of the virtues. The simple few lead to societies in
which free riding is rampant. If we want flourishing people we need to raise up virtuous people. It’s not such a platitude as it sounds.
*
*
*
*
Nussbaum’s book has a practical side, which is good; but her practicalities repeat
the errors of collectivism, which is bad. The Virginia School offers a solution.
Nussbaum notes that in 1992 the ratio of income in the richest country as against
the poorest was 72. Before modern economic growth it was much lower—3 to 1, for example (Nussbaum 2006, p. 224). The right way to look at this fact, I believe, is not to get
angry at the rich countries, which is the underlying tone of Nussbaum’s book, but to
lament that the poor counties have not joined the rocket of modern economic growth. If
you want to get angry, get angry at the kleptocrats (or the high-minded enablers of
kleptocrats) who run many poor countries—into the ground. The right away to confront the fact of modern divergence at the level of policy is to urge the countries to join
the rocket: to adopt the reasonably free economies, the reasonably honest courts, and
the reasonably non-extractive governments that seem to cause economic and political
success in the modern world, and to allow for the reasonably long run in which such
institutions work. Cases like East and West Germany, or North and South Korea, or
Mao’s China and Hong Kong appear to show that activating governments to intervene
more closely in the economy is not the solution. Rather the contrary.
323
Orwell, “Charles Dickens,” 1940, pp. 150-151.
169
Economic growth depends overwhelmingly on internal, domestic forces. Nussbaum treats the articulation of such a truth as though it were an ethical failing. She is
scandalized by Rawls’ libertarian assertion that “the causes of the wealth of a people
and the forms it takes lie in their political culture and in the religious, philosophical,
and moral traditions, . . . as well as in the industriousness and cooperative talents of [a
people] . . ., all supported by their political virtues.”324 She replies that colonialism,
“the international economics system, and the activities of the multinational corporations” are important reasons why poor countries are poor.325 It is in their stars, not in
their selves.
The scientific truth is that mostly the enrichment of a country like England since
1780 or Japan since 1860 or Korea since 1953 has depended on English and Japanese and
Korean people making investments out of their own consumption and allowing trade
among themselves and thinking up new ways to do things. Imperialism, it turns out,
was for the imperial powers an economic bust. Foreign trade was not an engine of
growth. Foreign investment has been greatly exaggerated as such an engine. And foreign aid most assuredly has not been one. There is a good deal of confusion about this.
The Japanese themselves, for example, are persuaded that having a balance of payments
surplus with the rest of the world should be the purpose of Japanese policy. But all the
policy does is give Americans excellent Toyota automobiles in exchange for engraved
portraits of George Washington, to the disadvantage of the courteous Japanese.
An economist could tell Nussbaum that in particular a redistribution from North
to South on which she places such hopes, “substantial material redistribution across national boundaries” (p. 242), is not the solution. “Giving all human beings the basic opportunities on which we have focused will surely require sacrifice from richer individuals and nations” (p. 273). No, it will not. What giving all human beings the basic opportunities requires is that presently poor countries join the modern economic world,
which is not a matter primarily of gifts from the North to the South.
Nussbaum favors the Scandinavian 2% Rule, that is, giving 2% of your national
income as foreign aid (pp. 316-317). “The precise figure is debatable; the general principle is not” (p. 317). I should like to know why it is not debatable. I am surprised that
Nussbaum does not mention that foreign aid has been a failure. Countries with large
amounts of aid (Ghana, for example) have not developed; countries with none (Hong
Kong again) have. And a great deal of government-to-government aid has gone to
324
325
Rawls 1999, The Law of People, p. 108, quoted in Nussbaum 2006, p. 239-40.
Buchanan writes that “Rawls must be classified as a more laissez faire
theorist than [Adam] Smith.” A minimum wage, Buchanan says,
“would clearly be ‘unjust’ under either Rawlsian or Smithian criteria.”
“John Rawls is far from the ‘defender of the liberal welfare state’ that he
has been made out to be” Buchanan, 1976, “The Justice of Natural Liberty,” in Collected Works, Vol. 1, p. 301, 302, 304.
Nussbaum 2006, p. 240. And likewise pp. 225, 236, 240, 258, 262, 266, 277, 306,
in which multinational corporations are said to be bad for people.
170
support the party or the big man in power.326 The current big man in Nigeria is known
to some of his enemies as ITT: “International Thief Thief.” As William Easterly notes in
his latest book, over five decades the North has given $2.3 trillion to the South, with no
result. No one believes that India’s recent joining of the rocket has anything to do with
foreign aid. Until India adopted capitalism the foreign aid did less than nothing. The
fastest growing country in the world has been for some decades now aidless China.
Nussbaum does concede at one point that “many nations of the world do not
have governments that represent the interest of the people taken as a whole” (p. 233).
That is to put it mildly. See China under Mao. Even the nations viewed conventionally
as having such governments—France and the United States, for example—have in fact
governments run for the interest of Iowa farmers, Parisian and Washingtonian civil
servants, French graduates of elite grandes écoles, and Texas oil companies, not your
regular Jacques or Jills. “One of the things people themselves might actually want out
of international relations is help in overthrowing an unjust regime.”327 Yes. That would
probably be a more productive investment than government-to-government money
“for” elementary schools that ends by making the big man’s bank account in Switzerland bigger.
I affirm that certain capabilities are necessary. Nussbaum has persuaded me of
this. It really is necessary, for example, that people (and especially for instance women)
become minimally educated. No amount of TV sets or Fritos can substitute for the ability to read a rental contract and to write a job application, not to speak of the minimal
literacy for participation in politics. I worry, though, that using the governments we
actually have to achieve the capabilities is to ride the back of a tiger. A government
strong enough, like Kemal Atatürk’s in the 1920s, to impose equality for women, say, is
also a government strong enough to corrupt the collection of government revenues.
Atatürk did not. But it is imprudent to depend on poor countries getting an Atatürk or
a Nelson Mandela or a George Washington just when they need them. More usually
they get a Marcos or a Nkrumah.
When Nussbaum says that it is a good idea to “assign the responsibility for
promoting others’ well-being (capabilities) to institutions” I really do stand amazed. I
wonder what sweet “institutions” she is talking about. The French riot police? The
Federal Bureau of Investigation? The Russian secret service? The institutions of American foreign policy under Bush II? It all seems a trifle twee, as the British say. As Buchanan puts it in 1992, “the idealist-utilitarian mindset . . . imposes its intellectual straitjacket on many,” for example on Martha Nussbaum.328 An ideal government, consisting perhaps of the better Swedish civil servants, is imagined to stand ready to engineer
life in Calcutta or Chicago.
326
327
328
William Easterly, The Elusive Quest for Growth: Economists' Adventures and
Misadventures in the Tropics Cambridge: MIT Press, 2001 and The White
Man’s Burden: How the West’s Efforts to Aid the Rest Have Done So Much Ill
and So Little Good London: Penguin, 2006.
Nussbaum 2006, p. NNN
Buchanan 1992, “Better Than Plowing,” Collected Works, Vol. 1, p. 17
171
On the contrary, some of us think that a big modern government is a ravenous
leviathan, or a band of robbers into whose clutches we have fallen. And short of these
libertarian nightmares, as Buchanan noted in 1978, the extension of the res publica that
Nussbaum and other communitarians advocate creates what economists call a fisheries
problem. A gigantic government—and modern governments in places like France or
the United States are “gigantic” in their abilities, historically speaking—is a public pond
in which K Street lobbyists and French public-sector trade unions can go fishing.
The theorist surely has some responsibility to tell how such “institutions” will do
the trick in the world as it actually is. Suppose we admit what is correct, that the most
successful method of increasing the Sen-Nussbaum capabilities has been economic
growth (Nussbaum denies this, for example on p. 282; Sen does not). Well. Are actual
governments able to deliver modern economic growth? I do not think so. They can
provide what Adam Smith advocated, such as defense and elementary education and
the law of contract, the Smithian list of capabilities. And then they can get out of the
way, as they have recently in China and India. Maoist central planning and the Great
Leap Forward in China, or five-year plans and the License Raj in India, did less than
nothing for the inhabitants. Nussbaum notes correctly that an advantage of the capabilities approach is that it focuses “from the start on what people are actually able to do”
(p. 290). I wish she would exhibit the virtue of prudence in the theorist and focus from
the start on what governments, or those “institutions” she hopes so much from, are actually able to do.
An Axiom of Good Will is popular in liberal circles (by the American definition
of “liberal,” I mean). It is: “if a policy is advocated with good will it is OK and should
be free from further scrutiny as to efficacy.” No it isn’t, and shouldn’t. Drug laws are
advocated with good will, we may for the moment suppose. But the laws have ruined
the lives of millions of Americans, especially Americans of color, and have corrupted
every police force from Kabul to Kansas City. The advocacy of utopias in a fallen, second-best world is mischievous, not OK. That was Ronald Coase’s point, to mention another of the Virginia School. To “assign to humanity generally the duty of realizing
these entitlements” (Nussbaum p. 291) makes us feel good. But it doesn’t accomplish
anything else. If governments are on the whole corrupt and corrupting—as they are
even in countries with pretty good governments: see the sad history of American road
construction or of Italian anti-mafia laws—then recommending that governments implement universal sisterhood is not efficacious. A social theorist concerned about real
social problems, as Nussbaum is, has a responsibility to be efficacious. If, as Nussbaum
notes, her purpose is political, that is, to achieve capabilities in real political communities, then her arguments should be. . . political.
172
Chapter 18:
But So Should the Right
A vivid realization that we need to talk about politics as it actually is, I say, is the
great merit of the so-called public choice, or Virginia, school in economics and politics
and political theory, that of James Buchanan and Gordon Tullock and their many colleagues. The school asks what governments can in fact do, considering that the governors have their own agendas—for example, the acquisition of large and secret bank accounts in Switzerland, and the monopoly of violence at home to collect them. Buchanan and friends are the reply to Nussbaum’s hazy nostalgia for collectivism.
But remember the Nussbaum Lemma and the Virtue-Ethical Theorem. Is a full
ethics missing? Does Nussbaum in the end get her own back relative to the Virginia
School?
“The Madisonian vision, with its embodied ethic of constitutional citizenship,”
Buchanan noted in one of his elegiac pieces after the 1960s, “is difficult to recapture
once it is lost from the public consciousness.”329 Of course it is easier to have the ethic
of a constitutional citizen if one is involved, as Madison and his founding brothers
were, in making and defending an actual, new constitution. Still, Buchanan is rightly
advocating an appreciation of constitutional issues, as against a game of maximizing
within a given constitution, which he believes characterizes the Me Generation. He
notes over and over again in his work that “if we [in prudence-only style] are considering games with effectively large numbers of players, there may exist little or no incentive for any single player to participate actively in any serious evaluation of the rules,”
that is, the constitution of the game.330 There is no point in voting in a large election if
casting the vote costs even a tiny inconvenience, five minutes to go to the polls, a spot of
rain, a longish line. He concludes that “participating in the discussion of constitutional
rules must reflect the presence of some ethical precept that transcends rational interest
for the individual.”331
Bingo. Suddenly we are back in an ethical world. “We remain,” Buchanan wrote
in 1992, “ethically as well as economically interdependent.”332 The most obvious sort of
329
330
331
332
Buchanan 1989, “The Ethics of Constitutional Order,” Collected Works, Vol. 1,
p. 372.
Buchanan 1989, “The Ethics of Constitutional Order,” Collected Works, Vol. 1,
p. 370.
Buchanan 1989, “The Ethics of Constitutional Order,” in Collected Works, Vol.
1, p. 371.
Buchanan 1992, “The Supply of Labor and the Extent of the Market, in Collected Works, Vol. 1, p. 359. By the way, let me mention here a technical objection to the case he makes in the essay---finding himself in agreement,
startlingly, with such men of the left in economics as Nicolas Kaldor and
Martin Weitzman—that inducing people to enter markets rather than
173
ethical precept, other-regarding, may not do the trick, in the middle reaches of the virtue diagram: “The individual may be truthful, honest, mutually respectful, and tolerant
in all dealings with others; yet, at the same time, the same individual may not bother at
all with the maintenance and improvement of constitutional structures.”333 He plays
checkers with a good will, refraining from cheating, say, but does not enter into the
question whether the 10 x 10 board is better than the (long-computer-solved) 8 x 8
board. In other words, Buchanan’s idea of “constitutional citizenship” is a transcendent
ethic, at the top of the diagram of the virtues. We vote because we have faith in the traditions of American democracy or hope for its future or some less dignified yet still
transcendent imagining, not because we irrationally expect to influence the outcome of
a senatorial campaign in which 5 million other citizens of Illinois are going to the polls.
In 1989 Buchanan wrote that “Each one of us, as a citizen, has an ethical obligation to enter. . . into an ongoing . . . constitutional dialogue.”334 But where does the inclination to fulfill our ethical obligations come from? Not, as Buchanan shows repeatedly, from prudence only. He wrote in 1978 that “Homo economicus has assumed. . . a
dominant role in modern behavior patterns.”335 He attributes the sad slip towards prudence only to larger polities, national politics (the K Street fishery again), and the “observed erosion of the family, the church, and the law” (remember: it’s 1978). Is that
right?
Buchanan is the greatest student of Frank Knight. Like Knight, he is a theologian
who dismisses theologies. He has a tragic, Protestant vision, as Robert Nelson has described it.336 We are sinners in the hands of an angry God, which God has arranged all
sorts of prisoners’ dilemmas and free-riding problems to stand it the way of a second
Eden that the naïve optimists like Nussbaum and McCloskey in their separate ways
think are attainable. We may not in fact be among the elect. The more there are of us,
the further we get from small communities, the more likely is damnation. As early as
1965 Buchanan was asserting that “the scope for an individualistic, voluntaristic ethics
must, of necessity, be progressively narrowed.”337 In 1978 he exclaims in anguish, “Is
333
334
335
336
337
staying at home reaps gains for all in the division of labor. The theorem
applies only to internationally or regionally non-traded goods: these such
as elementary education or sewerage or policing or the local theatre scene must exhibit the non-convexities he speaks of. Entry that allows international or regional specialization, and more and more so in the modern world, exhausts the gains from the division of labor in making automobiles and steel and wheat that Buchanan expects from inducing
housewives to get a market job.
Buchanan 1989, “The Ethics of Constitutional Order,” in Collected Works, Vol.
1, p. 371.
Buchanan 1989, “The Ethics of Constitutional Order,” in Collected Works, Vol.
1, p. 369.
Buchanan 1978, “Markets, States, and the Extent of Morals,” in Collected
Works, Vol. 1, p. 366.
Cite Nelson
Buchanan 1965, “Ethics Rules, Expected Values, Large Numbers,” in Collected
Works, Vol. 1, p. 327.
174
not man capable of surmounting the generalized public goods dilemma by moralethical principles that will serve to constrain his proclivities toward aggrandizement of
his narrowly defined self-interest?” But immediately he answers, No, not under the
large-polity conditions of modern governments.
The underlying dilemma that Buchanan has been worrying about for so long is
that although private goods are best provided in anonymous markets, public goods are
best provided in face-to-face communities, two people playing checkers or two people
married, or a small town in Tennessee. It is the classic dilemma of modern public finance, noted by Wicksell and the Italians and James Buchanan. The only solution is
ethical, and Buchanan is not optimistic about getting it.
*
*
*
*
But the paradox in economists like Buchanan or Tullock—this is my Nussbaumian criticism of the Virginia School—is that the ethical change Buchanan in particular advocates to solve the large-polity problem, or the big change in institutions necessarily supported by an ethical change, is undermined by the very prudence-only
framework he brings to the task. That is, the rhetoric of prudence only corrupts the public
discussion of getting beyond prudence only.
One of Buchanan’s contributions to prudence-only theorizing, for example, was
his 1975 paper, “The Samaritan’s Dilemma,” arguing that the Samaritan has every incentive to “pass by on the other side,” especially if the road is thronged with passers by.
But the Samaritan in the gospel of Luke (10:33-34) did not do so, for reasons that had
precisely nothing to do with prisoner’s dilemmas or prudence only. That of course is
the point of the parable. Suppose everyone around the Samaritan, and especially his
professor of economics or of law and economics, was saying, “Why be a sucker? Only a
fool would bother, under prudence-only ethical rules. Come on, Samaritan, pass by on
the other side.” That is the effect, I say, of 200 years of Benthamism in economic discourse
Why do we talk about ethics or about getting lists of capabilities correlated with
ethics or about forming constitutions on the basis of ethics assumed at the start? We do
so because we are exchanging persuasions in the way we exchange goods. Adam Smith
spoke of the “propensity to truck, barter, and exchange,” which Buchanan wishes to
place at the center of economics, as arising from the faculty of reason---so much for
prudence only and the reason half of the Enlightenment project. But Smith added, and
believed, “and the faculty of speech,” which is the other, freedom half, the matter of persuasion’s role in the economy, ignored after his death.338 We are, as Smith said, orators
through our lives. We preach. And what we preach is the seven virtues.
Buchanan complains about “lawyers [turning to] economic theory for new normative instructions,” by which in 1978 he probably meant the then Professor, soon to be
338
Smith, Wealth, 1776, Chp. 2 of Part I, second paragraph, p. 25, italics added.
Compare Deirdre McCloskey and Arjo Klamer, “One Quarter of GDP is
Persuasion,” The American Economic Review 85 2, May 1995: 191-195.
175
Seventh Circuit Court of Appeals Judge, Richard Posner.339 But what has given Posner
his influence (I mean aside from his crushing if often misled energy and brilliance) is his
retailing of just those theories of prudence only to which James Buchanan and Gordon
Tullock and numerous of their colleagues have so notably contributed. Don’t be a
sucker. Defect.
We need direct ethical change. Only that will protect the constitution, or result
in wide capabilities, or give birth to a society of love. Buchanan dismisses direct ethical
change with the anti-clerical’s sneer: “Rather than hope for a ‘new morality,’ I shall focus on the potential for institutional reform that may indirectly modify man’s behavior
towards his fellows.”340 Hard-nosed and practical. No preacherly talk of ethical conversion.
But institutional reform, in turn, is only possible if we stop speaking of people as
I’m-All-Right-Jack maximizers and start insisting that they are complete ethical beings.
Not saints or heroes, I mean, but anyway people trying to evince all seven of the virtues, often failing.
The change in professors’ talk won’t of course suffice. People outside the academy, too, need to adjust their rhetoric to the ethical world. But changing our ethical
rhetoric inside the academy will help. “I am sure,” wrote Keynes in 1936, “that the
power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas,” and so the subsequent career of Keynesianism showed, in its rise and in
its decline.
John Adams doubted “whether there is public Virtue enough to support a Republic”; yet James Madison expected political competition, like economic competition,
to make it “more difficult for unworthy candidates to practice with success the vicious
arts by which elections are too often carried.”341 Adams stands for a civic republicanism
depending on individual virtue, Madison for a liberalism depending à la Buchanan and
Tullock on constitutional structures. Either individual virtue is necessary for the polity
to thrive, or else ingenious structures can offset the passions with the interests. I suggest that the only way we are going to get the ingenious structures of Madison is in a
polity with the public virtues of Adams, and the only way we are going to get that in
turn is to start talking about it. All right: “preaching.” Since when has urging virtue on
our friends been a bad idea?
The analogy in ethical theory is the difference between act utilitarianism and rule
utilitarianism. Buchanan’s example of playing a game within a given set of rules is act
utilitarianism, and as he has been explaining to us for fifty years act utilitarianism has
great problems. In a game of chess, for example, do you cheat when your opponent
goes to the bathroom? The monster of prudence only assumed in most economic theorizing would. Therefore, says Buchanan, we have to rise to the level of rule utilitarian339
340
341
Buchanan 1978, “Markets, States, and the Extent of Morals,” in Collected
Works, Vol. 1, p. 366.
Buchanan 1978, “Markets, States, and the Extent of Morals,” in Collected
Works, Vol. 1, p. 360.
Compare Prindle, Politics and Economics, 2003, pp. 98, 70.
176
ism. We formulate for ourselves and others by mutual agreement some extensive rules
of the game. No cheating. A bishop moves on the diagonal. No taking out a .38 and
threatening our opponent. It is Hobbes’ and Locke’s or Rawls’ or Buchanan and
Tullock’s or Nussbaum’s social contract.342
But why would anyone follow the social contract? The answer is not, as Hobbes supposed, prudence only. That doesn’t work. The answer is Buchanan’s “constitutional
citizenship.” But in order for this in turn to work it must be supported by a third level,
above the rules and constitutions, namely, educated character. Ethos. Ethics.
You can think about it in a little table, where the two later levels solve the problem of the earlier one:
342
Buchanan 1987, “Justification of the Compound Republic: The Calculus in Retrospect,” in Collected Works, 16, p. 73.
177
The ethical level of ↓:
recommends
as social policy↓:
act utilitarianism
central planning,
Bergson/Samuelson
welfare economics
rule utilitarianism
constitutional change
ethics
policies to get
virtuous people
but leaves unsolved
the problem of↓:
rent seeking,
selfish interests
motivating
the changers
how exactly to
do this
Buchanan sometimes rejects ethical reasoning in terms that echo the so-called
“emotivism” of logical positivism and other hard-nosed theories, such as Hobbes’ in
1651: “Good and evil are names that signify our appetites and aversions.”343 In 1975
Buchanan disdained ethical discussion as “pure escapism; it represents empty arguments about personal values which spells the end of rational discourse.” We must proceed “on the presumption that no man’s values are better than any other man’s.”344
I don’t think Buchanan could really have meant this. Emotivism is also called the
"hurrah-boo" theory. Many “realist” thinkers, which is not Buchanan’s party, have really meant it. Ethical and aesthetic preferences, the American judge Oliver Wendell
Holmes, Jr. wrote in 1902, are “more or less arbitrary. . . . Do you like sugar in your coffee or don’t you?”345 Hurrah. In the same year: "Our tastes are finalities."346 Boo. In the
fourth year of the Great War he wrote to Harold Laski, “When men differ in taste as to
the kind of world they want the only thing to do is to go to work killing.”347
The problem is the word "taste," with its evocation of considerations more or less
arbitrary, sugar in your coffee, hurrah-boo. Joseph Schumpeter of Vienna and Harvard
expressed an ethical philosophy along similar lines: “We may, indeed, prefer the world
of modern dictatorial socialism to the world of Adam Smith, or vice versa, but any such
preference comes within the same category of subjective evaluation as does, to plagiarize Sombart, a man's preference for blondes over brunettes.” Hurrah-boo. Thus also
Lionel Robbins of the London School of Economics at about the same disturbed time: “If
we disagree about ends it is a case of thy blood against mine-or live and let live, according to the importance of the difference, or the relative strength of our opponents. . . . If
343
344
345
346
347
Hobbes, Leviathan, 1651, I, Chp. 15, p. 82; and I, Chp. 6, p. 24.
Buchanan 1975, “Boundaries on Social Contract,” in Collected Works, 16, p. 89.
Holmes, letter to Lady Pollock, Sept. 6, 1902, Holmes-Pollock Letters, Vol. 1, p.
105.
Holmes, Address . . . at the Dedication of the Northwestern University Law School
Building, quoted in Alschuler, Law Without Values, 2000, p. 24.
Holmes, Holmes-Laski Letters, Dec 3, 1917, quoted in Luban 1992, p. 244.
178
we disagree about the morality of the taking of interest . . , then there is no room for argument.”348 And a fount of such an attitude, Bertrand Russell: “As to ultimate values,
men may agree or disagree, they may fight with guns or with ballot papers, but they
cannot reason logically.”349 Russell certainly didn’t.
Emotivism is “the doctrine that all evaluative judgments and more specifically all
moral judgments are nothing but expressions of preference.”350 Emotivism, observe,
taken as a doctrine one should believe, is of course self-contradictory, since preaching
against preaching is preaching. But logic is not a strong point among the emotivists, or
the logical positivists.
I am saying that there is a tension in Buchanan’s thought, this lack of comfort
with ethical thinking in a man very given to . . . ethical thinking. Like Frank Knight,
Buchanan is a highly ethical thinker, “admittedly and unabashedly” celebrating, for example, constitutional political economy precisely for its “rationalization purpose or objective.”351 He is not by any means the laughing amoralist that Schumpeter pretended
to be. The judgment about dictatorial socialism is decidedly not in Buchanan’s ethical
world a preference more or less arbitrary, hurrah-boo.
Let me put the point another way. A paper by Buchanan and Viktor Vanberg in
1991 declares that people’s preferences have but two components, theories and interests. “A person may oppose the imposition of a highway speed limit because it is predicted to be unenforceable (a theory-component) or because he or she enjoys driving at
high speeds (an interest-component).”352 This is mistaken. There is also an ethical component: “High speed is good for the human spirit,” the ethicist may say, or “No government should interfere.” It seems apparent that human preferences are affected by
ethical reasonings. The ethical component often has nothing to do with the person’s
own pleasures—she may not know how to drive, for example, or herself be terrified by
high speed, but nonetheless she advocates ethically speaking the right to high speed for
others.
The reason the third, ethical component matters is that the veil-move in contractarian philosophy is supposed to leave only the theory component, what Buchanan and
Vanberg call “the knowledge problem,” since one does not know where ones interests
will be located in the rule-guided world thus enacted. But the deduction is mistaken.
The veil does take away interest, yes. But it leaves theories and ethics, a knowledge
problem and an ethical problem. The point applies equally to Hobbes and Gauthier and
Rawls and Nussbaum and Buchanan and Vanberg. The veil-move takes away particu348
349
350
351
352
Robbins, Nature and Significance, 1932, p. 134. Sen says that such a view was
"quite unfashionable then" Sen, Ethics and Economics, 1987. Not I think
among the reigning fashionistas of 1932.
Russell, Education and the Social Order, quoted in James F. Perry, "The Dream
Hypothesis, Transitions, and the Very Idea of Humanity," at
http://www.bu.edu/ wcp/Papers/ Teac/ TeacPerr.htm.
MacIntyre, After Virtue, 1981, p. 11, his italics.
Buchanan 1975, “Boundaries on Social Contract,” in Collected Works, 16, p. 88.
Buchanan and Vanberg 1991, “Constitutional Choice, Rational Ignorance and
the Limits of Reason, in Collected Works 16, p. 128.
179
lar, local, historical interest. From behind your veil you don’t advocate slavery because
for all you know you may end up as a slave. But as human beings actually are, and
must be if the constitution is to endure, the veil-move leaves the ethical component.
People after bourgeois English Quakerism detested slavery, and not merely because of
an unsupported expression of taste, but for new reasons more or less good, elaborated
in the past two centuries: “Slavery is inefficient”; “Slavery corrupts even the master”;
“Slavery violates the categorical imperative”; “Slavery would not be chosen from behind a veil of ignorance.”
Buchanan had earlier written that it would be “empty to evaluate imagined social states without consideration of the structure of rights, or rules, that may be expected to generate them.”353 It is what he and I would agree is wrong in Martha Nussbaum’s brave book. We can call his assertion the Buchanan Lemma. I’ve used it here to
say why I don’t agree with Nussbaum’s statist /NGO-ist system of foreign aid.
But as in Nussbaum’s case, our new Lemma applies to the very writer who formulated it. Nussbaum herself returns thereby the critical favor. It would be empty to
evaluate imagined constitutions, say Nussbaum and I, without consideration of the
structures of ethics that may be expected to generate them.
*
*
*
*
I am advocating what can be conceived of as the next step in Nussbaumian capabilities or the next step in Buchananesque constitutional reform. The next step is to take
all the human virtues seriously. You could call it a humanistic economics, gradually
emerging from the slow, dignified, and long-awaited collapse of the Samuelsonian program in economic science. It might be called the “second-stage classical economics”
that Vivian Walsh recently advocated, because after all it was in fact the program of the
blessed Adam Smith.354 Or it might simply be called “Smithian.”
Buchanan has long argued that we don’t need Max U to do economics.355 Smith
didn’t need it, for example. Keynes didn’t need it. Hayek didn’t need it. The Samuelsonian program was initiated by an amazing paper by a 23-year old Samuelson in 1938
on revealed preference and fully launched in his modestly entitled Ph.D. dissertation,
accepted 1941 and published 1947, The Foundations of Economic Analysis. Samuelson
founds economics on maximizing individuals and, in the political sphere (articulated
first by A. C. Pigou in the 1910s and 1920s at Cambridge and then mathematized in the
1930s by Samuelson’s friend at Harvard, Abraham Bergson) maximizing societies consisting of maximizing individuals. They are not just “individuals.” I am not here complaining about methodological individualism. They are maximizing individuals. The
mathematics of maximization, a mathematics already a century and a half old in the
1930s, became the dominant tool of economists. By the 1970s some economists, who
353
354
355
Buchanan 1975, “Individual Rights, Emergent Social States, and Behavioral
Feasibility,” in Collected Works, 16, p. 208.
Vivian Walsh 2000, 2003, Review of Political Economy full cite
Buchanan, “What Should Economists Do?” Southern Economic Journal, Vol. 30,
January 1964, pp. 213-22
180
themselves rose to dominate this part of the profession, demanded that everybody
"found" even the study of inflation, unemployment, and growth, namely, macroeconomics, on “micro-foundations,” that is, the Samuelsonian method of Max U. It didn’t
work, but it is still taught with the utmost rigor in graduate programs in economics. In
the same decade another group of economists, who later came like their teachers to
dominate the rest of the profession, demanded that everybody, simply everybody,
found the study of face-to-face interactions, namely, bargaining situations and the faculty of speech, on game theory, that is, Max U in another guise.
Buchanan and a small group of other economists, including now me, a latecomer, say that Max U is a curse, not a blessing. We are not, I emphasize, attacking mathematics or methodological individualism. These have their faults But have their virtues,
too. We anti-Samuelsonians say merely that economics should not be about a dubious
individual psychology, proven mistaken over and over again in the laboratories, or
about a desperately partial ethics. It should be about exchange and the ethical system (I
call it “bourgeois virtue”) that surrounds exchange. Buchanan said so a long time ago
in his presidential address to the Southern Economics Association.
The Max U idea came into its own in David Hume—not in his person, which approached as Smith remarked of his friend “as nearly the idea of a wise and virtuous
man as perhaps the nature of human frailty will permit” but in his utilitarianism.356
“The sole trouble which virtue demands,” declared Hume, “is that of just calculation,
and a steady preference for the greater happiness.”357 The idea was ancient, of course.
Epicurus recommended it, as did much later Machiavelli and Hobbes. Hume was
merely another alarming figure in a long line of tough guys saying as we say in Chicago, “Take it easy: but take it.” In Hume among sophisticates, though, it started to sound
respectable, and when Bentham elaborated on it NN years later it started to sound scientific, and when Mill brought it in NNNN to perfection it started to sound right. By
the time Samuelson dressed it in Lagrange’s mathematics a utilitarian ethic sounded to
many people like the only reasonable way to approach a question of what to do.
But Max U kills ethics. That was indeed Hume’s purpose, and Hobbes’, and
Machiavelli’s. The moment you insist that the only way to know what to do is to ask
what particular doings will maximize “utility” you have reduced ethics to the one virtue of Prudence. Banishing ethics was not Samuelson’s purpose. But in the philosophical atmosphere of the 1930s and 1940s, dominated by emotivism, it is hardly surprising
that banishing ethics from economics is in fact what he accomplished. A very different
economist, Milton Friedman, agreed with Samuelson on the banishment.
In other words, the very formulation of economics as a constrained maximization
problem or as a game or as micro-foundations, that is, as Max U, makes it impossible to
take other virtues seriously. You therefore find economists and evolutionary psychologists and the like saying, for example, that “love”—they commonly used the scarequotes—is merely getting the most for yourself, even if by the intermediate step of get356original
357
date? Correspondence, p. 221.
cite. Search Lib Fund.
181
ting something for the beloved. Or you find them claiming that justice will spring from
a group of Max Uers.
Buchanan and company reject Max U. My point is that in doing so the Buchananites create a space for a full ethics, which they sometimes admit. Indeed, only a nonMax U economics has such a space. The kiss of Hume is the kiss of death to a humanistic economics.
Buchanan in particular, following Knight and Hayek, has himself made a related
point about the society as a whole. He criticizes the Pigou-Bergson-Samuelson program
of social engineering that I mentioned. Briefly put, Buchanan argues that taking Max
Social U as your goal is a formula for tyranny. If the maximizers are the better Swedish
bureaucrats maybe it will not be so bad, at any rate until they retire and another and
less already-ethical group takes over. But in most countries as I said the bureaucrats,
being like the rest of us fallen humans, are not so ethical as the Swedes, and as Buchanan has pointed out they have good or bad purposes of their own distinct from the “welfare” of their charges. “Their charges.” The phrase captures the underlying problem
with a system of Max U generalized to social engineering. Who wishes to be held in
charge by Vladimir Putin, or for that matter George Bus? Who wishes to be child to a
governmental adult?
*
*
* *
My own argument, that we need to re-ethicize the social sciences, I am very willing to admit, has its own unresolved tensions, chiefly: by what mechanisms do I imagine that the next ethical step will take place? If our hope must rest partly in ethical
change, what is the basis for the hope?
One small contribution we ex-Samuelsonian economists and political scientists
and political philosophers can make is to stop talking of prudence only as the ideal constitution of liberty. It is not, and economists and calculators have done damage by obsessing on it all these years since Paul Samuelson first mathematized it, or since Jeremy
Bentham first formalized it, or since Bernard Mandeville first put it into verse, or since
Hobbes first declared it the natural law of humans, or since Machiavelli first suggested
it to the prince. In our times Amartya Sen was among the first Samuelsonian economists to de-convert; I am a late follower of Sen; Buchanan was already suspicious of
prudence only, but he had never been a Samuelsonian.
A contribution the non-economist clerisy can make to an ethical change is to
cease talking of voluntary exchange as exploitative, or as easily second-guessed by
those better Swedish bureaucrats. prudence only at the level of an ideal bureaucracy is
just as partial and unethical as prudence only at the level of individual motivation. We
need to inquire into how to make good people, including our governors, in the world as
it is.
The choice of an ethical character is so to speak a within-person constitutional
choice. We should be investigating how to produce good people, because good people
make good political and economic choices.
And anyway flourishing lives for human beings is what we seek.
182
Part 3:
Material Causes Do Not Work
183
Chapter 19:
Modern Growth is a Factor of at Least Fifteen
One result of the bourgeois virtues and their new prestige was
modern economic growth. Right through to the neoclassicals of the
1870s and into the mid-20th century it was viewed as small, coming
from specialization and trade. Smith, Mill, Marshall, even Keynes
posited a little-growth backdrop, being falsified as they wrote.
Locke sank into a swoon;
The Garden died;
God took the spinning-jenny
Out of his side.
Yeats, “Fragments” (1928),
The Collected Poems of W. B. Yeats
(Macmillan, 1956), p. 211)
But Adam Smith wrote two books on bourgeois virtues. The Theory of Moral Sentiments makes one set of arguments, centered on temperance (or self command, as he
calls it). The other and more famous book makes the arguments for Prudence in its own
terms. Had capitalism not succeeded materially to the extent it in fact has we would
not be discussing bourgeois virtues. They would still merit discussion, but they would
not get it. Indeed, without the material success of capitalism the gigantic class of educated people who spurn it would instead be tilling the land and minding the kitchen.
Consider then the prudential side of the bourgeois experience.
The heart of the matter is fifteen. Fifteen, or more, is the factor by which real income per head nowadays exceeds that around 1700 in Britain and in other countries
that have experienced modern economic growth.358 You, oh average participant in the
British economy, are fifteen times better supplied with food and clothing and housing
and education than your remote ancestors. If your ancestors lived in Finland, it is more
like a factor of 29, the average Finn in 1700 being not a great deal better off in material
terms than the average African at the time. If your ancestors lived in the Netherlands it
is only a factor of 10 or so, since in 1700 the Netherlands was the richest (and the most
bourgeois) country in the world, 70 percent better off than the soon-to-be United Kingdom. If in Japan, the factor since 1700 is fully 35.359 If South Korea, the factor merely in
the past half-century, since 1953, when income per head, despite access to some modern
technology, was about what it had been in Europe 450 years before, is almost 18,
358
359
For the international comparisons Maddison 1991, 2001; for Britain itself
Feinstein 1978, 1988 and Crafts 1985a.
Maddison 2001, p. 264, Table B-21.
184
crammed into a four decades instead of, as in the British case, stretched out over two
centuries.
The statistics are not perfect. “Real income” means what the nation as a whole
earns, abstracting from mere inflation—it’s the stuff we have, not the mere dollars.
That’s why economists call it “real.” True, what is measured by stuff (which covers
non-stuff stuff like education and entertainment) doesn’t include all of human happiness and doesn’t measure what it measures perfectly well. Stuff unimaginable in 1700
now crowds our lives, from air conditioning to anesthesia. That makes the factor of fifteen an understatement. And to mention the other direction of bias, the forests primeval and the hosts of golden daffodils are more rare---if on the other hand more cheaply
reached by people with more leisure and travel funds to reach them. Nor is the income
per head divided out perfectly fairly, then or now.
But the factor of increase could be ten or twelve or thirty-five, rather than fifteen,
and leave the heart of the matter undisturbed. Conservatively measured, the average
British person has about fifteen times more bread, books, transport, and innocent
amusement than the average person had three centuries ago. Nor have the poor gotten
poorer, as people are always saying. On the contrary, the equality of distribution has
improved. The poorest have benefited the most from modern economic growth. No
previous episode of enrichment approaches it—not China or Egypt in their, primes, not
the glory of Greece or the grandeur of Rome.
The fact is in rough outline not controversial, though its magnitude is not something that people suspicious of capitalism know on their pulse. If you ask the average
regular reader of The Nation how much better off in material ease the average American
was in the time pf President Clinton as against the time of President Monroe he will
come up with a figure such as, perhaps, 50 percent or even 200 percent—not, as is the
case, 2100 percent, a factor of nearly 22, which is the American history.
The gigantic enrichment of all—the average person as well as the captain of industry—who allow capitalism and the bourgeois virtues to do their work is one argument in favor of them. It is so to speak a practical justification for the sin of being neither soldier nor saint. You may reply, and truly, that money isn’t everything. But as
Samuel Johnson replied, “When I was running about this town a very poor fellow, I was
a great arguer for the advantages of poverty; but I was, at the same time, very sorry to
be poor.”360 Or you may ask the inhabitants of India (average per capita income in 1998
in 1990 dollars $1,746) or China ($3,117) whether they would have liked an American
income at that time ($27,331). Or you can note the direction of permanent migration.
Britain was of course first. And Britain was also first in the study of economics,
from the political arithmeticians of the seventeenth century through David Hume, Adam Smith, T. R. Malthus, David Ricardo, John Stuart Mill, and the British masters of the
subject in the early 20th century. Economics was for long a British and even disproportionately a Scottish subject; only after the Second World War did it become mainly
American. What is extremely odd is that the British economists did not recognize the fac360
Boswell, Life, 1763, Aetat. 54, Everyman ed., I, p. 273.
185
tor of fifteen as it was happening. The economists’ theories took useful account of little
changes—a 5 per cent rise of income when cotton textiles grew or a 10 per cent fall
when Napoleon ruled the Continent. But they did not notice that the change to be explained, 1780 - 1860, was not 10 percent but 100 per cent, and was on its way to that
1,400 per cent relative to 1700. Only recently has the inquiry into the nature and causes
of the wealth of nations begun to recognize this astonishing oversight.
In 1954 Joseph Schumpeter was scornful of the classical economists for their failure to see what was happening. Malthus and Ricardo "lived at the threshold of the
most spectacular economic development ever witnessed. . . . [yet] saw nothing but
cramped economies, struggling with ever-decreasing success for their daily bread."361
Their student John Stuart Mill even in 1870 "had no idea of what the capitalist engine
was going to achieve" (same place).
To restrict attention to what Mill could have known, between 1780 and 1860,
dates covering the classic industrial revolution, British national income per head doubled, though population also more than doubled. A much larger nation was much richer per head, early in the factor of fifteen. In his Essay on the Principle of Population (1798)
the Anglican priest and economist T. R. Malthus predicted the opposite. Malthus told a
great truth about earlier history. In medieval England during the centuries before 1348 a
rising population had become poorer, and in Elizabethan England the impoverishment
happened again: more Englishmen meant less to go around per head. But in late Georgian and early Victorian England a rising population became, richer, much richer. The
fact was contrary to every prediction of the economists, those “dismal scientists,” in
Carlyle’s phrase (who called them so, by the way, not at all on this account, as is commonly believed, but because they were opposed to a paternalistic slavery).362 Most
economists believed then as now that there’s no such thing as a free lunch. And therefore they saw nothing in prospect c. 1830 but misery for the working man and riches for
the landowners.
The economists, in other words, did not notice that something entirely new was
happening 1780-1860. Economists have been even in our time a little slow to grasp the
extent of modern economic growth. As the demographer Anthony Wrigley put it a
while ago, “the classical economists were not merely unconscious of changes going on
about them that many now term an industrial revolution: they were in effect committed
to a view of the nature of economics development that ruled it out as a possibility.”363
At the moment (say, 1848) that John Stuart Mill came to understand an economy in
equilibrium the economy grew away from the equilibrium. It was as though an engineer had satisfied himself of the statics that kept a jumbo jet from collapsing as it sat
humming on the tarmac, but failed to notice when the whole thing proceeded to launch
into dynamic flight.
361
362
Hist Ec Anal, p. 571.
cite Levy and Sandra Peart
363 personal correspondence, quoted in Cameron.
186
The mistake the economists made, believing they had a completed theory of the
social laws of motion, was to overlook ingenuity. In 1787 the dissenting preacher, political radical, and insurance actuary Richard Price was therefore optimistic:
It is the nature of improvement to increase itself. . . . Nor are there, in this
case, any limits beyond which knowledge and improvement cannot be
carried. . . . Discoveries may, for aught we know, be made in future time
which, like the discoveries of the mechanical arts and the mathematical
sciences in past time, may exalt the powers of men and improve their
state to a degree which will make future generations as much superior to
the present as the present are to the past.
Price 1787
By 1830 an historian like Thomas Macaulay, respectful of the economics of his
day but with a longer view, could see the event better than could most of his economist
friends. He wrote:
If we were to prophesy that in the year 1930 a population of fifty million,
better fed, clad, and lodged than the English of our time, will cover these
islands, that Sussex and Huntingdonshire will be wealthier than the
wealthiest parts of the West Riding of Yorkshire now are, . . that machines constructed on principles yet undiscovered will be in every house, .
. many people would think us insane.364
Later in the 19th century and especially in the socialist days of the 20th century it was
usual to deprecate such optimism, and to characterize Macaulay in particular as hopelessly “Whiggish” and progress-minded and pro-capitalist. That he was, a bourgeois to
the core. But Whiggish and progress-minded and pro-capitalist or not, he was exactly
correct, even in his estimate of British population in 1930 (if one includes the recently
separated Irish Republic, he was off by less than 2 per cent). The pessimists of his times,
both economists and anti-economists, were wrong, though as always fashionable—
Schumpeter remarks in this connection that "pessimistic views about a thing always
seem to the public mind to be more 'profound' than optimistic ones."365 The economic
optimists of the 1830s and 1840s, as Schumpeter called them, Henry Carey in the United
States and Friedrich List in Germany, with engineers like Charles Babbage in England,
"saw vast potentialities looming in the near future."366 It makes one suspect the pessimists nowadays.
In the suggestive jargon of statistics, the startling rise of income 1700 or 1780 to
the present can be called the “first moment,” the average change. There’s little historical
disagreement about the first moment, at least in its order of magnitude. Macaulay was
correct in prospect and so are the dozens of economic statisticians who have confirmed
it in retrospect. Few doubt that by the third decade of Victoria’s rule the ordinary English person was better off than eighty years before, and was about to become still better
1830: I, ii, 185
HisEcAnal 1954, p. 572n5.
366 Hist Ec Anal p. 572.
364
365
187
off.367 And no one doubts that the average modern English person is vastly better off
than her great-great-great- . . . [say it eight times, my dears] grandmother.
The second moment is the variability of the change, its pattern of acceleration and
deceleration. Second moments are more difficult to measure. You can know the average height of British women more exactly than you can know its variability. As Simon
Kuznets, the economist who pioneered the historical study of national income, once
said, perhaps too gloomily, during our period “the data are not adequate for testing hypotheses concerning the time patterns of growth rates.”368 An error of plus or minus 20
per cent in measuring income c. 1700 may not matter much for the 1,400 percentage
points of change to the present, but will matter a great deal in deciding whether working people in fact paid for the incessant French Wars of the eighteenth century. It’s how
historians earn their living, quarreling about whether the first generation of workers in
modern industry were exploited to get it, or whether late Victorian Britain failed economically, or whether socialism when it came to Britain finally in 1946 was a good idea
or a bad one. But the point is: waves there were, but the flood was unstoppable.
When did it start? Various emblematic dates have been proposed—the famous
day and year 9 March 1776, when Adam Smith’s The Nature and Causes of the Wealth of
Nations provided a rhetoric for the age; the five months in 1769 when Watt took out a
patent on the separate condenser in his steam engine and Arkwright took out a patent
on the water frame for spinning cotton; or 1 January 1760, when the furnaces at Carron
Ironworks, Stirlingshire, were lit. It sometimes seems that each economic historian has
a favorite date, and a story to correspond. Elizabeth Carus-Wilson spoke of “an industrial revolution of the thirteenth century”: she found that the fulling mill (that is, a machine for thickening wool cloth) was “due to scientific discoveries and changes in technique” and “was destined to alter the face of medieval England.”369 Looking at the matter from 1907, the American historian Adams could see a “movement from unity into
multiplicity, between 1200 and 1900, . . . unbroken in sequence, and rapid in acceleration” (1907: 498). The economic historians Eric Jones and Joel Mokyr have taken a similar long view of European exceptionalism.370 The most widely accepted period for It,
whatever exactly It was that led to the factor of fifteen, is still the late eighteenth century, and recent work on China has suggested that until 1800 there was not much exceptional about Europe.371 New quantifiers in the 1980s concluded that the “take-off” in
Britain was exaggerated by the pioneering generation of quantifiers.372 Growth could
be faster for the late comers. Sweden and Switzerland could adopt what Britain and
Belgium had invented. But the first industrial nation, rather unsurprisingly, was slow
in coming. A hard coming we had of it.
367
368
369
370
371
372
Lindert and Williamson 1983a.
1971: 41-2.
1941 :41.
Jones 1981, 1988; Mokyr 1990a.
cite
Crafts 1985a and Harley 1982
188
If the onset of modern economic growth fed on itself, then its start could be a
trivial accident. Yet one might wonder why then it did not happen before. “Sensitive
dependence on initial conditions” is the technical term for some “nonlinear” models---a
piece of so called “chaos theory.” But history under such circumstances becomes untellable.373 Joel Mokyr identifies another pitfall in storytelling (1985c: 44): rummaging
among the possible acorns from which the great oak of the industrial revolution grew
“is a bit like studying the history of Jewish dissenters between 50 B.C. and 50 A.D.
What we are looking at is the inception of something which was at first insignificant
and even bizarre,” though “destined to change the life of every man and woman in the
West.”
Anyway it happened slowly, at a stately pace. Britain was no factory in 1860.
Even cotton textiles, growing apace, could not absorb all the many workers in agriculture. John Clapham made the point in 1926, observing that still in 1850 half the population was in employment untouched by “the first industrial revolution.” As Maxine
Berg and Patricia Hudson have noted, some technologically stagnant sectors (building,
say) saw large expansion, some progressive sectors little or none (paper); some industries working in large scale units did little to change their techniques (naval shipyards
early in the period), some in tiny firms were brilliant innovators (the metal trades).374
Big factories in the famous sectors were not the whole of the factor of fifteen. And
steam power in Britain increased by a factor of fully ten from 1870 to 1907, long after the
dark satanic mills first enter British consciousness.375 Perhaps, to get back to the puzzle,
that is why it was largely invisible to economists and some others watching it—though
not to many possessed of common sense and eyes to see. Macaulay wrote in 1830, “A
single breaker may recede; but the tide is evidently coming in.”376 Arthur Hugh Clough
did not have praise for capitalism in mind—though the son of a cotton manufacturer, he
was extremely dubious about the whole thing, like most Romantics ---but his verse captures it well:
For while the tired waves, vainly breaking,
Seem here no painful inch to gain,
Far back, through creeks and inlets making,
Comes silent, flooding in, the main.
Productivity change was fast in textiles, 1780-1860. A piece of cotton cloth that
was sold in the 1780s for 70 or 80 shillings (two months’ wages for a workingman) was
by the 1850s selling for around 5 shillings (a few days’ wages), on its way to a few
minutes’ wages by now. In the process cotton cloth moved from fashionable to commonplace, in the manner a century and a half later of nylon (first called “artificial silk”)
and other synthetics. A little of the decline in the price of finished cotton cloth was attributable to declines in the prices of raw cotton itself after the introduction of the cotton
gin (invented in 1793) and the resulting expansion of cotton plantations in America. But
373
374
375
376
McCloskey 1991.
Berg 1985; Hudson 1986, 1989
Musson 1978: 8, 61, 167-8.
Macaulay, 1830, p. 185.
189
in other ways the price of inputs rose: by 1860, for example, wages of cotton workers
had risen markedly. Why then did the price of manufactured cloth fall? It fell because
organization and machinery were massively improved in cotton textiles, 1780 to 1860.
The case is typical in showing more about the second moment than one might at
first think knowable. It shows for example that productivity growth slowed in cotton,
because power weaving, which came late, was apparently less important than power
carding of the raw wool and power spinning of the wool into yarn. And it shows that
invention is not the same thing as innovation (cf. Chapman and Butt 1988). The heroic
age of invention ended by the late 1780s, by which time Hargreaves, Arkwright, Kay,
Crompton and Cartwright had flourished. But the inventions saw steady improvement
later—one of the main findings of quantitative economic history is that the pattern is
typical, invention being only the first step (the same is true, for example, of railways,
which improved in scores of small ways right into the twentieth century, with large
falls in real costs). The real cost of cotton textiles had halved by the end of the eighteenth century. But it was to halve twice more by 1860.
Few sectors were as progressive as cotton textiles. Productivity in iron grew a
half to a third as fast. Productivity is not the same as production. The production of iron
increased enormously in Britain 1780 to 1860—by a factor of 56, in fact, or at 5.5 per cent
per year (Davies and Pollard 1988; “small’ growth rates,” as you might think 5.5 is,
make for big factors if allowed to run on: 5.5 per cent is explosive industrial growth by
historical standards, a doubling every 72/5.5 = 13.2 years; thus South Korea since 1953).
The expanding British industry crowded out the iron imported from Sweden
and proceeded to make Britain the world’s forge. But the point is that it did so mainly
by applying a somewhat improved technology (puddling) to a much wider field, not by
the spectacular and continuous falls in cost that cotton witnessed. The cost of inputs to
iron (mainly coal) changed little from 1780 to 1860; during the same span the price of
the output (wrought iron) fell from £20 a ton to £8 a ton. The fall in real costs, again, is a
measure of productivity change. So productivity in wrought iron making increased by a
factor of about 2.5, an admirable factor of change. Yet over the same years the productivity in cotton textiles, we have seen, increased by a factor of 7.7.
Other textiles imitated the innovations in cotton (Hudson 1986), significantly
cheapening their products, though less rapidly than the master industry of the age: as
against cotton’s 2.6 per cent productivity growth per year, worsteds (wool cloth spun
into a thin yarn and woven flat, with no nap to the cloth) experienced 1.8 per cent and
woolens 0.9 per cent (McCloskey 1981b: 114). Coastal and foreign shipping experienced
rates of productivity growth similar to those in cotton textiles (some 2.3 per cent per
year as compared with 2.6 in cotton). The figure is derived from North’s estimates for
transatlantic shipping during the period, rising to 3.3 per cent per year 1814-60 (1968).
Again the “low” percentage is in fact large in its cumulative effects: freights and passenger fares fell like a stone, from an index of around 200 after the Napoleonic Wars to
40 in the 1850s. Canals and railways experienced productivity growth of about 1.3 per
cent (Hawke 1970). Transportation was therefore among the more notably progressive
parts of the economy.
190
But many other sectors, like iron as we have seen, experienced slower productivity growth. In agriculture the productivity change was slower still, dragging down the
productivity of the economy as a whole; taking one year with another 1780-1860, agriculture was still nearly a third of national income. Productivity change varied radically
from one part of the economy to the other, as it has continued to do, one sector taking
the lead in driving up the national productivity while another settles into a routine of
fixed technique, computers taking over the lead from chemicals and electricity. Agriculture itself, for example, came to have rapid productivity change in the age of the
reaper and the steam tractor, and still more in the age of genetic engineering in the
twentieth century. But from 1780 to 1860 textiles and transport were the leaders.
191
Chapter 20:
It was Not Thrift
Why? One prominent explanation is thrift. It does not work.
Schumpeter defines capitalism variously at various times. His definition in Business Cycles (1939) is "that form of private property economy in which innovations are
carried out by borrowed money" (I, p. 223). In other words, "we shall date capitalism as
far back as the element of credit creation," by which he means fractional reserve banking---in effect any sort of money storage in which the storer is not liable to keep all the
money on hand all the time (p. 224). He notes that such institutions existed in the Mediterranean before they existed in Northern Europe, and so he would be unsurprised to
find business cycles then. Capitalism on this definition forms part of a private enterprise economy, but there can be private enterprise without credit and therefore without
"capitalism." The use of thrift, not its total amount, is what is at stake.
The word "thrift" in English is still used as late as John Bunyan to mean simply
"wealth" or "profit," deriving from the verb "thrive" as "gift" from "give" and "drift" from
"drive." But its sense 3 in the Oxford English Dictionary is our modern one, dating significantly from the 16th century: "food is never found to be so pleasant . . . as when . . .
thrift has pinched afore" (1553); "so I will if none of my sons be thrifty" (1526).
The modern "thrift," sense 3, can be viewed as a mix of the cardinal virtues of
temperance and of prudence in things economic. Temperance is the cardinal virtue of
self-command facing temptation. Lead me not into temptation. Prudence, by contrast,
is the cardinal virtue of practical wisdom. It is reason, know-how, savoir faire, rationality. Prudence lacking temperance does not in fact do what it knows it should thriftily
do. Temperance lacking prudence does not know what to do. A prudent housewife in
the "Ladder to Thrift," as the English agricultural rhymester Thomas Tusser put it in
1580, "makes provision skillfully."377 Without being full of skill, that is, prudent, she
does not know how to be thrifty in saving tallow for candles or laying up salt mutton
for Christmas.
Prudent temperance in a sense has no history, in that it is ever present in human
society. The Hebrew bible, for example, speaks of thrift, though not very often, usually
associated with diligence: "The sluggard will not plough in the autumn by reason of the
cold; therefore shall he beg in harvest, and have nothing"; "Seest thou a man diligent in
his business? He shall stand before kings" (Proverbs 20:4; 22:29). Jesus of Nazareth
and his tradition used parables of thrift to point to another world, though again the
parables of thrift are balanced by parables of liberality, such as changing water into
wine to keep the party going. "Eat and drink," advises the Koran, "but do not be waste377
Tusser, Five Hundred Points, 1580, p. 13. I modernize spelling and punctuation
in quoting earlier English. The past is a foreign country, but the fact
should show in its strange behavior and strange ideas, not in its spelling
conventions.
192
ful, for God does not like the prodigals" (7:31). Still again, thrift is not a major theme of
the Koran.
Of course other faiths than the Abrahamic ones admire on occasion a wise thrift.
The Four Noble Truths of Buddhism, to be sure, recommend that life's sorrow can be
dissolved by the ending of desire, in which case advice to be thrifty would lack point.
Be "thrifty" with your daily bread? Buddhism is similar in this respect to Greek and
Roman stoicism, which advocated devaluing this world's lot, an inspiration to Christian
saints of thriftiness early and late. But the "Admonition to Singāla" is in the entire Buddhist canon "the longest single passage . . . devoted to lay morality."378 Buddha promises the businessman that he will “make money like a bee” if he is wise and moral:
Such a man makes his pile
As an anthill, gradually.
. . . . He should divide
His money in four parts;
On one part he should live,
With two expand his trade,
And the fourth he should save
Against a rainy day.
The rate of savings recommended is fully 75 percent— with no allowance for charity,
which made Buddhist commentators on the text uneasy. From the huts of the Aborigines to the lofts of Chicago, humans need to live within their incomes, being by their
own lights "thrifty."
In England the thirteenth-century writers of advice books to Norman-English
landowners start with thrift and go on to the details of husbandry. The third paragraph
of The Husbandry by Walter of Henley, after a bow in the second paragraph to the passion of Jesus, prays "that according to what your lands be worth yearly . . . you order
your life, and no higher at all."379 And then in the same vein for five more paragraphs.
The anonymous Seneschaucy, written like Walter in medieval French in the late 13th century, instructs the lord's chief steward "to see that there is no extravagance. . . on any
manor . . . . and to reduce all unnecessary expenditure. . . which shows no profit. . . .
About this it is said: foolish spending brings no gain."380 The passage deprecates "the
practices without prudence or reason" (lez maners saunz pru e reyson). So much for a rise
of prudence, reason, rationality, and thrift in, say, the 16th century. Prudent temperance
rose with Adam and Eve.
The prehistory of thrift, in other words, extends back to the Garden of Eden. It is
laid down in our genes. A proto-man who could not gain weight readily in feast times
would suffer in famine. Therefore his descendent in a prosperous modern society has a
weight problem. Prudent temperance does not require a stoic or monkish abstemiousness. A ploughman burning 3000 calories a day had better get them somehow. One
378
379
380
Introduction by A. L. Basham, p. 120, to in Embree, ed., Sources of Indian Tradition, Vol. I. The passage below is Dīgha Nikāya 3.182ff., reprinted p. 123
Walter, late 13th century, in Oschinsky, 1971, p. 309.
Senechaucy, late 13th century, in Oschinsky, 1971, p. 269.
193
should be thrifty in eating, says Tusser, but not to the point of denying our prudent
human solidarity:
Each day to be feasted—what husbandry worse!
Each day for to feast is as ill for the purse.
Yet measurely feasting with neighbors among
Shall make thee beloved, and live the more long.381
The average English and American-English person from the 16th through the 18th
century, then, surely practiced thrift. But this did not distinguish her from the average
English or American-English person before or after, or for that matter from the average
person anywhere since Eden. “'My other piece of advice, Copperfield,' said Mr. Micawber, 'you know. Annual income twenty pounds, annual expenditure nineteen six,
result happiness. Annual income twenty pounds, annual expenditure twenty pounds
ought and six, result misery.' To make his example the more impressive, Mr. Micawber
drank a glass of punch with an air of great enjoyment and satisfaction, and whistled the
College Hornpipe. I did not fail to assure him that I would store these precepts in my
mind."382
Thrift in the sense of spending exactly what one earns is forced by accounting.
Not having manna from heaven or an outside Santa Claus, the world must get along on
what it gets. The world's income must equal to the last sixpence the world's expenditure, "expenditure" understood to include investment goods. So too Mr. Micawber. If
he spends more than he earns he must depend on something turning up, that is, a loan
or gift or inheritance. He draws down his credit. In the meantime his diminishing balance sheet—what he owns and owes—pays to the last sixpence for his punch and his
house rent.
Thrift in the sense of earning much more than one spends, and thereby accumulating assets in that balance sheet, is again a matter of accounting. You must expend
everything you earn somehow, on bread or bonds house-building or whatever. But of
course you can expend foolishly or well, on bombs or on college educations. If you refrain from silly consumption of Fritos and other immediate consumption goods, "abstaining from consumption" in the economist's useful way of putting it, you necessarily
save, that is, add to your hoard buried in the back garden or to a bank account or to
your investments in educations or roadways or battleships.
There is nothing modern, I repeat, about such accounting. It comes with life and
the first law of thermodynamics, in the Kalahari or in Kansas City. In particular the
pre-industrial European world I am here contrasting with modern times needed urgently to abstain from consumption, "consumption" understood as immediate eating and
other immediate expenditures that are not investments in a future. Yields of rye or barley or wheat per unit of seed planted in medieval and early modern agriculture were
only 3 or 4—they are over 100 now. The low yields forced Europeans to refrain from a
great deal of consumption if they did not want next year to starve. One quarter to one
third of the grain crop went back into the ground as seed in the fall or the spring, to be
381
382
Tusser, Five Hundred Points, 1580, p. 18.
Dickens, David Copperfield, 1849-50, Chapter 12.
194
harvested the next September. In an economy in which the grain crop was perhaps 1/2
of total income, that portion alone of medieval saving implied an aggregate, social saving rate of upwards of 12 percent. The usual rate of saving in modern industrial economies is seldom above 10 percent.
Furthermore, trade in grain was restricted in climatic extent, so grain storage
even for consumption in people's mouths, and not just for investment in next year's
seed, was also high by modern standards. Grain storage amounted to another desperate form of saving, crowding out more modern forms.383 In recent times if the grain
crop does poorly in America the world market easily supplies the difference from a different clime. In the late Middle Ages grain did flow from the Midlands to London or
from Burgundy to Paris. But it began to flow to Western Europe in large amounts from
as far away as Poland only gradually in the 16th and 17th century, through the efforts of
thrifty Dutch merchants and shipbuilders, and only in the 19th century from as different
a climate as Ukraine or, finally, from North and South America or even Australia. Until
the 18th century therefore the grain crops here and there in the relevant and narrow
market area tended to fail together. The potato famine of the 1840s was the last replay
of a sort of undiversified catastrophe that was commonplace in the 1540s and more so in
the 1340s. In such circumstances you stored and saved, in gigantic percentages of current income, or you starved.
These scarcities were broken in the New World of British Americans. They ate
better than their Old-World cousins within a generation of the first settlements.384 That
was not hard: their English cousins were passing then through the worst times for the
workingman since the early 14th century.385 Plentiful land, at any rate out on the literal
frontier, made it unnecessary to save so much in grain, and freed the sum for other investments. Yet wait: although the North American English became even as a colony
well off by British standards, British North America was by no means the home of the
industrial revolution. It was too small, too tempted by agriculture, too far away. The
northeast of the United States, like southern Belgium and northern France, was to become a close follower, in the 1790s and 1800s. But the leaders, from the 1760s, were
northwest England and lowland Scotland, lands of grindingly necessary thrift.
The point is that there is no aggregate increase in thrifty savings to "explain" the
modern world. Thrifty saving is not peculiar to capitalism, and has nothing to do with
an alleged rise of prudence or greed or anything else in the childhood of the modern
world. Actual saving was high before modern times, and did not change much with
modern capitalism.
So too actual greed. In characterizing capitalism in 1867 as “solely the restless
stirring for gain, this absolute desire for enrichment, this passionate hunt for value”
Marx was quoting MacCulloch’s Principles of Political Economy (1830): “This inextinguishable passion for gain, the auri sacra fames [‘for gold the infamous hunger’], will always lead capitalists” (quoted in Capital, Vol. I, p. 171n2). In 1904 Max Weber, writing
383
384
385
McCloskey and Nash, "Corn at Interest, " 1984. Cf. Cipolla, 1993, p. 89.
Fogel, Escape from Hunger, 2004.
Innes, "Introduction," 1988, TITLE, p. 5.
195
when the German Romantic notion that medieval society was more sweet and egalitarian than modern capitalism was beginning to crumble in the face of historical research,
thundered against such an idea that greed is "in the least identical with capitalism, and
still less with its spirit." "It should be taught in the kindergarten of cultural history that
this naïve idea of capitalism must be given up once and for all." In his General Economic
History (1923) he writes, "the notion that our rationalistic and capitalistic age is characterized by a stronger economic interest than other periods is childish."386 Auri sacra
fames is from The Aeneid, Book III, line 57, not from Benjamin Franklin or Advertising
Age. The lust for gold "has been common to all sorts and conditions of men at all times
and in all countries of the earth."387
And so too actual luxury, the opposite of thrift. "Depend on it, sir," said Samuel
Johnson in 1778, "every state of society is as luxurious as it can be. Men always take the
best they can get," in lace or food or educations.388 Marx noted cannily that "when a certain stage of development has been reached, a conventional degree of prodigality,
which is also an exhibition of wealth, and consequently a source of credit, becomes a
business necessity. . . . Luxury enters into capital's expenses of representation."389 True.
Otherwise it would be hard to explain the high quality of lace on the collars of blackclad Protestant Dutch merchants in paintings of the 17th century, or indeed the market
for the expensive oil paintings in their hundreds of thousands representing the merchants and their world.
Readers of the magnificent historical Chapters 25-31 in Capital, at any rate those
who credit what Marx says there, will find all this hard to believe. Marx's eloquence
persuades them that someone writing in 1867, very early in the professionalization of
history, nonetheless got the essence of the history right. The history Marx thought he
perceived went with his logic that capitalism, drawing on an anti-commercial theme as
old as commerce, just is the same thing as greed. Greed is the engine that powers his
"equation" (as he imagined it to be) of M  K  M'. That is, money starting as an
amount M gets invested, through thriftiness, in Kapital, which is intrinsically exploitative, generating surplus value appropriated by the capitalist to arrive at a new, higher
amount of money, M'. And then again and again and again, fix this when all’s set
to get the quotation right "endlessly."390 The "endless"/"never-ending" word, by
the way, which was echoed during the Dark Ages in rural monkish economic theory
and still resonates in Marx-influenced notions of capitalism, originated twenty-four centuries before Marx in the Greek aristocratic disdain for commerce. People of business,
declared aristocratic Plato and aristocrat-loving Aristotle, are motivated by apeiron, unlimited, greed.
386
387
388
389
390
Weber 1923 [trans Frank Knight 1927], p. 355.
Weber, Protestant Ethic, 1904-05, p. 17.
Boswell's Life, April 14, 1778, quoted in Mathias, p. 302.
Marx, Capital, 1867, Chp. 24, Sec. 3, p. 651.
E.g. Marx, Capital, 1867, Chp. 24, Sec. 1, p. 641; and Chp. 26, p. 784, "We have
seen how money is changed into capital; how through capital [a] surplus-value is made, and from surplus value more capital."
196
For all Marx's brilliance—anyone who does not think he was the greatest social
scientist of the 19th century has not read enough Marx—he got the history almost entirely wrong. Whatever the value of his theories as a way of asking historical questions,
almost no important historical fact can you rely on Marx. This is not some special
Marxian fault. The same is true of the other practitioners of merely philosophical history before the facts started arriving in bulk at last, during the 20th century: Hume, Rousseau, Smith, Hegel, Tönnies, Durkheim, and even, a late instance, on many points Max
Weber, and still later Karl Polanyi.391 The theory of capitalism that educated people still
carry around in their heads springs from Marx, St. Benedict, and Aristotle, in the rhetoric of these eloquent men. It is economically mistaken. And the point here is that it is
historically mistaken as well.
The myth of Kapitalismus is that thrift among the bourgeoisie consists precisely in
the absence of a purpose other than accumulation for its own sake, solely the restless
stirring for gain. Thus the late Robert Heilbroner: "capitalism has been an expansive
system from its earliest days, a system whose driving force has been the effort to accumulate ever larger amounts of capital itself."392 Thus Weber, too, in 1904: "the summum
bonum of this ethic [is] the earning of more and more money. . . . Acquisition . . . [is] the
ultimate purpose of life."393 Weber here, contrary to the thundering just quoted, retails
Marx, money-to-capital-to-money. "Accumulate, accumulate!" declared the man himself in 1867, "This is Moses and the prophets!"394
At the level of individuals there has never been any evidence for the historical
change that is supposed to characterize modern forms of greedy thrift. The chief evidence that Weber gives in The Protestant Ethic and the Spirit of Capitalism is a humorless
reading of Benjamin Franklin's Autobiography. Like many other readers of Franklin, especially non-American readers, Weber took the checklist of virtues a young man used to
discipline himself as the man's essence. He failed to note Franklin's actual behavior as a
loving and passionate friend and patriot, or his amused ironies about his young self.395
Weber modified the pointlessness of the Marxian impulse to accumulate, accumulate by
claiming that "this philosophy of avarice" depends on a transcendent "duty of the individual toward the increase of his capital," becoming a "worldly asceticism."396 But his
391
392
393
394
395
396
Santhi Hejeebu and I have laid out the case against Polanyi's economic history in "The Reproving of Karl Polanyi," 2000.
Heilbroner, Worldly Philosophers, DATE, p. 201. Compare p. 156, "an ownerentrepreneur engaged in an endless race," and so forth.
Weber, Protestant Ethic, 1904-05, p. 53.
Marx, Capital, 1867, Chp. 24, p. 652. And "accumulation for accumulation's
sake, production for production's sake."
Lawrence, Studies, 1924. The most well-known of the amused ironies is his
comment on a late addition to his list of virtues, Humility: "I cannot
boast of much success in acquiring the reality of this virtue; but I had a
good deal with regard to the appearance of it” Claude-Anne Lopez remarked once that Franklin will lack a full biography until someone with
a sense of humor attempts it.
Weber, Protestant Ethic, 1904-05, p. 51, italics supplied.
197
Franklin, who after all had lost most other traces of his ancestors' Calvinism, whether
spiritual or worldly, quite by contrast with his abstemious young friend and enemy
John Adams, for example, abandoned at age 43 "endless" accumulation and devoted the
rest of his long life to science and public purposes. So much for "ever larger amounts of
capital itself" or a "duty toward the increase of capital" or "accumulate, accumulate."
Many fine scholars have taken in with their mother's milk a belief that modern
life is unusually devoted to gain, and that thrift is therefore something recent, dirty, and
bourgeois, though lamentably profitable. "The unlimited hope for gain in the market,"
writes the otherwise admirable political theorist Joan Tronto, "would teach people an
unworkable premise for moral conduct, since the very nature of morality seems to dictate that desires must be limited by the need to coexist with others."397 But running a
business, unlike professing at a university, would teach anyone that gain is limited.
Dealing in a market, unlike sitting in the Reading Room of the British Museum writing
burning phrases against the market, would teach that desires must be limited by the
need to coexist with others. The tuition of a market society in scarcity, other-regarding,
and liberal values works as an ethical school. As the historian Thomas Haskell put it in
1985, "contrary to romantic folklore, the marketplace is not a Hobbesian war of all
against all. Many holds are barred. Success ordinarily requires not only pugnacity and
shrewdness but also restraint," that temperance.398
Even so fine an historian as Alan Macfarlane believes the Aristotelian/Marxist/Weberian lore: "the ethic of endless accumulation," he writes, "as an end
and not a means, is the central peculiarity of capitalism."399 If it were, the miser would
be a strictly modern figure, and not proverbial in every literature in the world. "In this
consists the difference between the character of a miser," wrote Adam Smith in 1759,
"and that of a [thrifty] person of exact economy and assiduity. The one is anxious about
small matters for their own sake; the other attends to them only in consequence of the
scheme of life which he has laid down for himself."400 Accumulate, accumulate is not a
"scheme of life" in the ethical sense that Smith had in mind.
At the level of the society as a whole there is "unlimited" accumulation, at any
rate if war and rapine and rats do not intervene. Corporations, having legally infinite
lives---though in truth one in ten die every year---are to be sure sites of accumulation.
The individual economic molecules who make up the river of capitalism may not always want to accumulate beyond age 43, but the river as a whole, it is said, keeps rolling along. True, and to our good. The machines and improved acreage and splendid
buildings and so forth inherited from an accumulating past are good for us now.
But there is no historical case for "accumulation, accumulation" being peculiar to
capitalism. Old buildings are not novelties. Infinitely lived institutions like families or
churches or royal lineages existed before modern capitalism, and were themselves, too,
sites of accumulation. Thus improved acreage spread up the hillsides under the pres397
398
399
400
Tronto, Moral Boundaries, 1993, p. 29.
Haskell's remark is quoted in Innis, "Introduction," 1988, p. 39n61.
Macfarlane, Culture of Capitalism, 1987, p. 226.
Smith, Theory of Moral Sentiments, 1759 1790, III.6.6, p. 173.
198
sure of population before the Black Death. Thus the medieval cathedral were raised
over centuries. Thus Oxford colleges were built, and endowed in real estate, itself accumulated investment in drains and fencing and barns.
"The bourgeoisie," wrote Marx and Engels in 1848, "during its rule of scarce one
hundred years has created more massive and colossal productive forces than have all
the preceding generations together."401 It was a prescient remark. But the classical
economists from Adam Smith to Marx were writing before the upsurge in real wages of
British and Belgian and American working people in the last third of the 19th century,
and long, long before the explosion of world income in the 20th century. They imagined
a moderate rise of income per person, perhaps at the most by a factor of two or three,
such as might conceivably be achieved by Scotland's highlands becoming similar to capital-rich Holland (Smith's view) or by manufacturers in Manchester stealing savings
from their workers (Marx's view) or by the savings generated from globalization being
invested in European factories (John Stuart Mill's view). But the classical economists
were mistaken.
The prehistory of thrift was revolutionized around 1960 when economists and
economic historians realized with a jolt that thriftiness and savings could not explain
the industrial revolution. The economists such as Solow and Abramowitz discovered
that only a smallish fraction even of recent economic growth can be explained by thrift
and accumulation. At the same time the economic historians were bringing the news
that in Britain the rise in savings was too small to explain much a all. Simon Kuznets
and later Charles Feinstein provided the rigorous accounting of the fact. It was anticipated in the 1950s and 1960s by numerous British economic historians, in detailed studies of banking and manufacturing. Peter Mathias summarized the case in 1973: "considerable revaluation has recently occurred in assessing the role of capital." 402 That is
no overstatement.
The classical and mistaken view overturned by the economic historians of the
1950s and 1960s is that thrift implies saving which implies capital accumulation which
implies modern economic growth. It lingered in a few works such as Walt Rostow's The
Stages of Economic Growth (1960), and most unhappily in what William Easterly (2001)
has called the "capital fundamentalism" of foreign aid, 1950 to the present. The belief
was that if we give Ghana over several decades large amounts of savings, leading to
massive capital investments in artificial lakes and Swiss bank accounts, and give Communist China not a penny, Ghana will prosper and Communist China will languish.403
401
402
403
Marx, Communist Manifesto, 1948, p. 59.
Mathias 1973, “Capital, Credit and Enterprise in the Industrial Revolution,"
where exactly?
Rostow, Stages, 1960; Easterly, Elusive Quest, 2001.
199
Chapter 21:
Nor Was It Original Accumulation,
or the Protestant Ethic
We are back to what actually happened 1800-2000—and, once it was fully recognized, what killed the notion among most economists and economic historians that
thrifty saving was the way to massive and colossal productive forces—a rise of income
per person by a factor of, let us say, 15. Again: what then explains it?
New thoughts, what the economic historian Joel Mokyr calls the "industrial enlightenment." It was ideas of steam engines and light bulbs and computers that made
Northwestern Europe and then much of the rest of the world rich, not new accumulations from saving.404 Accumulation of physical capital is not the heart of modern capitalism, as economic historians have understood since their researches of the 1950s and
1960s and as economists have understood since the calculations by Abramowitz and
Solow in the 1950s, and before them the calculations by G. T. Jones in 1933.405 Its heart
is innovation.
Of course, if you think up a waterpower-driven spinning machine you need
some savings to bring the thought to fruition. But another of the discoveries of the
1960s by economic historians was that the savings required in England's heroic age of
mechanization were modest indeed, nothing like the massive "original accumulation of
capital" that Marxist theory posits. Early cotton factories were not capital-intensive.
The source of the industrial investment required was short-term loans on inventories
and loans from relatives---not savings ripped in great chunks from other parts of the
economy.
The classical and Marxist idea that capital begets capital, "endlessly," is hard to
shake. It has recently revived a little even among economists, in the form of so-called
"new growth theory," an attempt to give M  K  M' a mathematically spiffed-up
form. The trouble is that, as I have noted, savings and urbanization and state power to
expropriate and the other physical-capital accumulations that are supposed to explain
modern economic growth have existed on a large scale since the Sumerians. Yet modern economic growth, that wholly unprecedented factor in the high teens, is a phenomenon of the past two centuries alone. Something happened in the 18th century that prepared for a temporary but shocking "great divergence" of the European economies from
those of the rest of the world.406
404
405
406
McCloskey, "Industrial Revolution," 1981.
Jones, Increasing Returns, 1933 should be better known among economists. A
student of Marshall, he anticipated the mathematics of the "residual." He
died young, and his work was forgotten except by economic historians.
Pomeranz, Great Divergence, DATE
200
The marxisant analysis is that what happened is the "original accumulation of
capital." The original or primitive accumulation was according to Marx the seed corn,
so to speak, or better the starter in the sourdough, in the growth of capital. We're back
to thrift or savings, not by historical fact but by blackboard logic. "The whole movement," Marx reasoned, "seems to turn on a vicious circle, out of which we can only get
by supposing a primitive accumulation, . . . an accumulation not the result of the capitalist mode of production, but its starting point."407 As the economic historian Alexander Gerschenkron put it in 1957, with characteristic sarcasm, it is "an accumulation of
capital continuing over long historical periods—over several centuries—until one day
the tocsin of the industrial revolution was to summon it to the battlefields of factory
construction."408
Looking at the thrift necessary for an accumulation in a cheerful way, the starting
point was a supposed rise of thriftiness among Dutch or especially English Puritans.
Marx characterized such tales as praise for "that queer saint, that knight of the woeful
countenance, the capitalist 'abstainer'."409 We can join him for a moment in disbelieving
the optimistic tale, noting further, and contrary to his own pessimistic tale, as I have
said, that abstention is universal. Saving rates in Catholic Italy or for that matter Confucian China were not much lower, if lower at all, than in Calvinist Massachusetts or
Lutheran Germany. According to recent calculations, in fact, British investment in
physical capital as a share of national income was strikingly below the European norm—
only 4% in 1700, as against a norm of 11%, 6% as against 12% in 1760, and 8% against
over 12% in 1800.410 Britain's investment, though rising before and then during the industrial revolution, showed less, not more, abstemiousness than in the less advanced
countries around it. The evidence suggests, in other words, that saving depends on investment, not the other way around. When in 19th century the rest of Europe started to
follow Britain into industrialization, its savings rates rose, too. And its markedly higher
rates during the 18th century did not cause it then to awaken from its medieval slumbers. Saving was not the constraint. As a great medieval economic historian, M. M.
Postan, put it, it was not "the poor potential for saving" but the "extremely limited"
character in pre-19th-century Europe of "opportunities for productive investment."411
Marx's notion in Capital, on the contrary, was that an original accumulation was a
sine qua non, and that there was no saintliness about it. The original accumulation was
necessary because (Marx averred, wrongly) masses of savings were necessary, and
"conquest, enslavement, robbery, murder, briefly, force, play the greater part."412 He
instanced enclosure in England during the 16th century (which has been overturned by
historical findings that such enclosure was minor) and in the 18th (which has been over407
408
409
410
411
412
Marx, Capital, 1867, p. 784.
Gerschenkron, "Reflections on the Concept of `Prerequisites,'" 1957, p. 33.
Marx, Capital, 1867, Chp. 24, Sec. 3, p. 656.
Crafts, Leybourne, and Mills, 1991, Table 7.2, p. 113.
Postan is quoted with approval by another great student of the times, Carlo
Cipola in Cipola, 1993, p. 91.
Capital, p. 785.
201
turned by findings that the labor driven off the land was a tiny source of the industrial
proletariat, and mainly in the south and east where in fact little industry was going on).
He gave a large part then to regulation of wages in making a proletariat in the 16th century (which has been overturned by findings that half of the labor force in England as
early as the 13th century already worked for wages). And then to the slave trade: "Liverpool waxed fat on the slave-trade. This was its method of primitive accumulation"
(which has been overturned by findings that the alleged profits were no massive
fund).413 Later writers have proposed as the source of the original accumulation the exploitation by the core of the periphery (Poland, the New World).414 Or the influx of
gold and silver from the New World—strange as it is then that imperial Spain did not
industrialize. Or the exploitation of workers themselves during the Industrial Revolution, out of sequence. Or other loot from imperialisms old and new. Or, following on
Marx's assertion in the Manifesto, even 17th-century piracy.
None of these, it has been found, make very much historical sense. Such findings
are in truth not very surprising. After all, conquest, enslavement, robbery, murder,
briefly, force has characterized the sad annals of humankind since Cain and Abel. Why
didn't earlier and even more thorough expropriations result in an industrial revolution
and a factor of eighteen, that nineteen hundred percent increase in the welfare of the
average Briton or American or Taiwanese? Something besides thrifty self-discipline or
violent expropriation must have been at work in northwestern Europe and its offshoots
in the 18th century. Thrifty self-discipline and violent expropriation have been too
common in human history to explain a revolution unique to Europe around 1800.
And as a practical matter a pile of physical capital financed from, say, Piet Heyn's seizure of the Spanish treasure fleet in 1628 would by 1800 melt away to nothing. It
does not accumulate. It depreciates. The confusion is between financial wealth in a
bank account, which is merely a claim by this person against that person to the society's
real wealth, and the society's real wealth in a house or ship or education. Real wealth is
what needs to be available for real investment. You can't build a factory with pound
notes, or dig a canal with gold coins. You need bricks and wheelbarrows and skilled
people to wield them. Mere financing can hardly be the crux, or else the Roman church
in its command of tokens of wealth would have created an industrial society in 1300.
Or Philip II—who after all was the principal beneficiary of those treasure fleets that the
English and Dutch privateers preyed on—would have financed an industrial revolution
in Spain. So any original accumulation supposed to be useful to any real industrialization must be available in real things. But "what you possess [in real, physical things]
will pass, but what is with God will abide" (Koran 16:96). "These lovely [earthly]
things" wrote St. Augustine, "go their way and are no more. . . . In them is no repose,
because they do not abide."415 A real house made in 1628 out of Piet's profit would be
tumbled down by 1800, unless in the meantime its occupants had continued to invest in
it. A real educated person of 1628 would be long dead, a real machine would be obso413
414
415
Capital, p. 833.
Wallerstein TTLE DATE
Augustine, Confessions, 398 AD, IV, x.
202
lete, a real book would be eaten by worms. The force of depreciation makes an original
accumulation spontaneously disappear.
This is not to say, note well, that conquest, enslavement, robbery, murder play no
part in European history. A Panglossian assumption that contract, not force, explains,
say, the relation between lord and peasant defaces the recent work on "new" institutionalism, such as that of Douglass North.416 But, pace Marx, modern economic growth
did not and does not and cannot depend on the scraps to be gained by stealing from
poor people. Stealing from poor people, when you think about it, could hardly explain
enrichment by a factor of eighteen. Would you do well by robbing the homeless people
in your neighborhood, or by breaking into the residence of the average factory worker?
Does it strike you as plausible that British national income depended much on stealing
from an impoverished India? If it did, why did real income per head in Britain go up
sharply in the decade after Britain "lost" India?
Modern economic growth has not depended on saving, or on stealing to get the
saving. Turgot and Smith and Mill and Marx got the story entirely wrong, rather unsurprisingly considering the stately pace at which the economies they were looking at
were improving, at least by contrast with the frenetic pace after 1848 and especially after 1948, and then most of all after 1998. "All the authors [who] followed the TurgotSmith line," wrote Schumpeter as the frenzy was becoming apparent, "[were] at fault in
believing that thrift was the all-important (causal) factor."417 Most savings for innovation, Schumpeter had noted twenty years earlier, "does not come from thrift in the strict
sense, that is from abstaining from consumption. . . but [from] funds which are themselves the result of successful innovation," in the language of accountancy "retained
earnings."418 The money for any massive innovation---as against the savings in the strict
sense---comes, he argues, from "money creation" by banks.
The causal factor has depended instead on the invention of entirely new ways of
propelling ships or making shoes. And nowadays it depends, if your country is as Gerschenkron put it, "relatively backward," on leaping over the slow early stages of invention and investment by adopting what has already been invented, getting now cell
phones instead of laboriously investing in land-lines and then laboriously inventing
substitutes. Money creation, or the 50 percent savings rates typical of present-day China, finances the leaping. The money creation in any moderately well run economy is
routinely available: it is simply credit, belief in the future. What was not routinely
available in the 18th century was the stock of inventions. This is why China and India
can now grow at rates inconceivable in the 18th and early 19th centuries, before the inventions were well launched. It is why in the late 19th century Sweden and then Japan
in the early 20th century and South Korea in the late 20th century caught up so very
quickly.
See Douglass North's Under the Process, 2004, and Ogilvie's devastating empirical inquiry Ogilvie, 2004 into the Panglossian hypothesis.
417 Hist Ec Anal 1954, p. 572n2.
418 Schumpeter, The Theory of Economic Development 1926 [1934], p. 72.
416
203
"Capitalist production," Marx declared, "presupposes the pre-existence of considerable masses of capital."419 No it doesn't. A modest stream of withheld profits will
pay for repairing the machines and acquiring new ones, especially the uncomplicated
machines of 1760. In 1760 the most complicated "machine" in existence was a first-rate
ship of the line, itself continuously under repair. And so far as the starter is concerned,
it is very small, as in sourdough bread, and could come from anywhere, not only from
some great original sin of primitive accumulation.
What did happen in the 17th and 18th centuries, it would appear, is so to speak an
original accumulation of inventive people, such as James Watt and Benjamin Franklin.
Such people sought bourgeois and thrifty ways of making and doing things, turning
away from the projects of honorable display characteristic of an aristocratic society. By
the 18th century they were launched on careers of producing a wave of gadgets that has
not yet ceased rolling over us. An original accumulation of habits of free publication
and vigorous discussion created, as Mokyr argues in The Gifts of Athena (2002), "a world
in which 'useful' knowledge was indeed used with an aggressiveness and a singlemindedness that no other society had experienced before. . . . It was the unique Western way."420 We do not yet know for sure why this happened in northwestern Europe
and did not happen elsewhere until later, and in plain imitation of northwestern Europe, though many economic historians suspect that Europe's political fragmentation
leading to comparative freedom for enterprise was important.421 What did not happen
was a big rise in European thrift.
*
* *
*
So nothing much changed from 1348-1600 or from 1600 to 1848 in the actual circumstances of thriftiness. And the modest changes did not matter much. Individual
Dutch and English speaking people who initiated the modern world exercised personal
thrift, or did not, as they still do, or do not. But changes in aggregate rates of saving
drove nothing of consequence. No unusual Weberian ethic of high thriftiness or forceful expropriation started economic growth. East Anglian Puritans learned from their
Dutch neighbors and co-religionists how to be thrifty in order to be godly, to work hard
in order, as John Winthrop put it, "to entertain each other in brotherly affection." 422
That is nice, but it is not what caused industrialization—as indeed one can see from the
failure of industrialization even in the Protestant and prosperous parts of the Low
Countries, or for that matter in East Anglia itself. The habits of thriftiness and luxury
and profit, and the routines of exploitation, are humanly ordinary, and largely unchanging. Modern economic growth depends on ingenuity in crafting gadgets. This in
turn appears to depend on free societies, at any rate when the ingenious gadgets need
to be invented, not merely borrowed as the USSR and the People’s Republic of China
419
420
421
422
Capital, p. 794.
Mokyr, Gifts of Athena, 2002, p. 297.
See for instance Baechler, 1971; McNeill, 1982; Jones, 1988; Tilly, 1990; Macfarlane, 2000.
Winthrop quoted in Innes, "Puritanism and Capitalism," 1994, p. 106.
204
were been able to do. Even the first modern economic growth did not depend on massive investment or an original accumulation of capital.
What did change 1600-1848, however, and dramatically, was the high- and lowcultural attitude towards thrift. Thriftiness and other specifically economic virtues, such
as prudent calculation of costs and benefits or an admiring attitude towards industrial
novelties or an acceptance of ethically acquired profits, became first in Holland and
then at last in England, and even a bit earlier in England's remote American colonies
and in England's impoverished neighbor, Scotland, fully respectable, honorable, admired, permitted, encouraged, not obstructed and disdained. This was unique in world
history, and the change did have stupendous economic consequences. A change in the
superstructure determined a change in the base.
Away from northwestern Europe and its offshoots c. 1848 the economic virtues
were still not respectable, at any rate in the opinion of the dominant classes. Right up to
the Meiji Restoration of 1867, after which things in Japan changed with lightning speed,
leading opinion scorned the merchant. In Confucian cultures more widely the merchant was ranked as the lowest of the classes: in Japan, the daimyo, the samurai, the
peasant, the craftsman, the merchant. A merchant in Japan and China and Korea was
not a "gentleman," to use the European word, and had no honor.
Likewise c. 1600
Georg Simmel claimed in The Philosophy of Money (1900, 1907) to detect a "psychological feature of our times which stands in such a decisive contrast to the more impulsive, emotionally determined character of earlier epochs . . . . Gauging values in
terms of money has taught us to determine and specify values down to the last farthing."423 In a word, thriftiness reigns now, as against the warm non-calculativeness of
earlier folk. This is false, a piece with Weber's claim that a rise of rationality characterizes the modern world. The Great War was soon to make such optimistic Euro-centrism
look strange indeed. Some "rationality." Ernest Renan, professor of Hebrew at the
Collège de France from 1862, most famous for his claim that Jesus was a good chap if a
trifle primitive and oriental, had declared that "we must make a marked distinction between societies like our own, where everything takes place in the full light of reflection,
and simple and credulous communities," such as those that Jesus preached in.424 After
the events of the 20th century in Europe, which exhibited irrationality, impulse, credulousness, and rather little of the full light of reflection, one stands amazed that anyone
can still believe in the unusual rationality or prudence or thriftiness of the modern European world.
In fact people always and everywhere have been more or less rational and more
or less impulsive, both. They exhibit the seven virtues, and the numerous corresponding vices, all. In medieval Europe one can see in Walter and the Seneschaucy the pervasiveness of a money economy. In 1900 Simmel had little way of knowing how wrong
his notions of the "rise of the money economy" were to prove in actual as against philo423
424
Simmel, Philosophy of Money, 1900 1907, p. 444.
Quoted in Wood, Broken Estate, 1999, p. 262.
205
sophical historical research. At that time only a few lone geniuses like Frederick Maitland had it right. It has subsequently been discovered that everything was for sale for
money in olden times, for instance husbands and eternal salvation. People in 1300
thought of values down to the last farthing.
Where Simmel is correct, however, is again that attitudes and commonplace
rhetorics about prudence and temperance did change, 1600-1800.
The Low Countries were at the time the point of contrast. Well into the 18th century Holland served as a model for the English and Scots of how to be thrifty and bourgeois, and certainly how to talk it.
The rising class in the English 16th and 17th century was not only the bourgeoisie,
but the gentry, viewed as one of two classes of "gentlemen"---the leading characters in
novels by Fielding and Austen standing just below England's exceptionally tiny aristocracy. Yet a mere hundred years after Shakespeare the English, surprisingly, were very
busy transforming themselves from admirers of the aristocracy into admirers of the
bourgeoisie. Even the gentry and aristocracy, who for centuries had had in fact a
sharper eye for profit than their lordly rhetoric would allow, became frankly businesslike about their land holdings, culminating in Farmer George III. In the 1690s, with a
Dutch king, the William of William and Mary, the British proceeded to adopt Dutch institutions such as a central bank and a national debt and a stock market, and undertook
to cease being inconstant, rash, vainglorious, light, and deceiving (they retained "suspicious and despising of foreigners”), or at least to cease talking about it. Evidently something changed during the late 17th century in the evaluation of prudent temperance as
against courageous hope, and so the evaluation of thrift.
The admiration had long-term consequences. The behavior of the elite changed
some, but its theory of behavior, once hostile to bourgeois values, changed more. The
King did not believe any longer that he could by right seize money from the City of
London. The effective rulers of Britain became more and more mercantilist (c. 1700)
and then free trading (c. 1840)—anyway more and more concerned with national profit
and loss. As Montesquieu put it in 1748, "other nations have made the interests of
commerce yield to those of politics; the English, on the contrary, have ever made their
political interests give way to those of commerce."425 Well. . . not "ever," but by 1748,
often. Such an ordering of ideas was second nature to the Dutch in 1600. It had to be
learned by the British. The British became known as unusually calculating, instead of
as before unusually careless in calculating. The actual change in individual behavior
was not great. Right up to the 19th century the rest of the world was shocked by the
aristocratic/peasant brutality of British soldiers. A little if rich island did not paint a
quarter of the world red by sweet bourgeois persuasion. But the change in ideology
was great and permanent and finally softening.
425
Montesquieu, The Spirit of the Laws 1748, I, p. 321, Book XX sec. 7, quoted in
Innes 1994, p. 96.
206
A long-evolving orthodoxy in English history claims that on the contrary England long espoused a "gentlemanly capitalism" hostile to bourgeois values.426 Right
through late Victorian times and beyond, it is said, capitalism was trammeled by estateyearning and cricket-loving. It seems a dubious claim. To lament the economic "failure" of the first industrial nation, which has remained from 1700 to the present one of
the richest countries in the world, has always seemed a trifle strange. From the time of
atmospheric steam engines to the present, England and Scotland together have been
world centers for invention: modern steel, radar, penicillin, and magnetic resonance imaging, to name a few.427 A surprisingly high percentage of world inventions still come
out of little Britain. And as E. P. Thompson pointed out early in the debate about gentlemanly capitalism, the landed aristocrats themselves, and their protective belt of gentry, came to be bourgeois in values. They labored at high farming the way their financiers in London labored at deal making and their manufacturing countrymen in Lancashire at spinning cotton. And they respected and honored such labor.
*
*
*
*
There are many tales told about the pre-history of thrift. The central tales are
Marxist or Weberian. Both are mistaken. Accumulation has not been the heart of modern economic growth, or of the change from the medieval to the early-modern or from
the early-modern to the fully modern economy. If you personally wish to grow rich, by
all means be thrifty, and thereby accumulate—though a better bet is to have a better
idea and be the first to invest in it. But if you wish your society to be rich, you should
not urge thrift, not much. You should rather work for your society to be free, and
thereby open to new ideas, and thereby educable and ingenious, and thereby very rich.
"Thrift" has been much honored in American civic theology. But like many other of the
sacred words, such as "democracy" or "equality" or "opportunity" or "progress," its rhetorical force turns out to be more important historically than its material force. Time for
the old tales of thriftiness to be retired.
426
427
Pat Hudson gives a brief but penetrating introduction to the issue in pp. 218225 of her lucid classic, The Industrial Revolution 1992.
As has been argued in detail by David Edgerton in Science, Technology, 1996
and Warfare State, 2005.]
207
Chapter 22:
Foreign Trade Was Not It,
Nor the Slave Trade, Nor Imperialism
Another things we have learned in the past thirty years of research into the era,
to put the findings in a nutshell, is that reallocation was not the cause. Shuffling resources around is not the way to the factor of fifteen. Expanding this industry and contracting that one might get you a 10 percent national gain. But not 1400 percent. To put
the findings another way, we have learned many Nots: that industrialization in Britain
as in the followers has not been mainly a matter of foreign trade, not a matter of internal
reallocation of the labor force, not of transport innovation, not investment in factories,
not education, not even science. The task of the next thirty years will be to untie the
Nots.
Consider foreign trade. An old tradition carried forward by Rostow and by
Deane and Cole puts much emphasis on Britain’s foreign and colonial trade as an engine of growth. What the recent research has discovered is that the existence of the rest
of the world mattered for the British economy, but not in the way suggested by the
metaphor of an “engine of growth.”428
What has become increasingly clear from the work of Williamson and Neal (Williamson 1985, 1987, 1990b; Neal 1990) among others is that Britain functioned in an international market for many goods and for investment funds. More exactly, the fact has
been rediscovered—it was a commonplace of economic discussion by Ricardo and the
rest at the time (it became obscured in economics by the barriers to trade erected during
the European Civil War, 1914-45, and aftermath just ended).
By 1780 the capital market of Europe, for example, centered in Holland and England, was sophisticated and integrated, capital flowing with ease from French to Scottish projects. True, the market dealt mainly in government debt. The old finding of
Pollard (1964) and others survives: industrial growth was financed locally, out of retained earnings, out of commercial credit for inventories and out of investors marshaled
by the local solicitor (Richardson 1989). But “the” interest rate relevant to local projects
was determined by what was happening in wider capital markets, as is plain for example in the sharp rises and falls of enclosure in the countryside with each fall and rise in
the rate of interest, like housing construction nowadays. The interest rate in the late
eighteenth century also determined booms and busts in canal building. And the interest rate in turn was determined as much by Amsterdam as by London.
The same had long been true of the market in grain and other goods, as David
Ricardo assumed in his models of trade c. 1817 as though it were obvious. The disruptions of war and blockade masked the convergence from time to time, and regulations,
such as the Corn Law, could sometimes stop it from working. But the European world
428O’Brien
and Engerman 1991 demur.
208
had a unified market in wheat by the eighteenth century, as is becoming clear. Already
in 1967 Braudel and Spooner had shown in their astonishing charts of prices that the
percentage by which the European minimum was exceeded by the maximum price fell
from 570 per cent in 1440 to a mere 88 per cent in 1760 (1967: 470). Prices continued to
converge, a benefit of the rapid growth of productivity already noted in shipping and
railways. The same could be said of prices of iron, cloth, wood, coal, skins and the rest
of the materials useful to life around 1800. They were beginning to cost roughly the
same in St Petersburg as in New York.
The reason the convergence is important is this: an economic history that imagines the British economy in isolation is wrong. If the economy of Europe is determining
the price of food, for example, it makes little sense to treat the British food market as
though it could set its own prices (except, of course, by protective tariffs: which until the
1840s it imposed). Purely domestic assumptions, such as those around which the controversy over agriculture’s role in industrialization have raged, will stop making
sense.429 The supply and demand for grain in Europe, or indeed the world, not the
supply and demand in the British portion of Europe, was setting the prices faced by
British farmers in 1780. Likewise for interest rates or the wages of seamen. Centuries
earlier the price of gold and silver had become international.
The intrusion of the world market can become so strong that the domestic story
breaks down entirely. One can tell a domestic story in the eighteenth century of how
much was saved, but not a domestic story of what interest rate it was saved at. One can
tell a domestic story in the early nineteenth century of the supply of labor from a slowly
growing agricultural sector, but not a domestic story of the entire supply of labor to
Liverpool, Glasgow and Manchester, if Ireland is not included. Nots.
Pollard, again, argued persuasively that for many questions what is needed is a
European approach, or at least a north-western European regional approach.430 He
wrote in 1973, “the study of industrialization in any given European country will remain incomplete unless it incorporates a European dimension: any model of a closed
economy would lack some of its basic and essential characteristics.”431 The political analogue is that it would be bootless to write a history of political developments in Britain
or Italy or Ireland 1789 to 1815 without reference to the French Revolution. Politics became international---not merely because French armies conquered most of Europe but
because French political ideas became part of political thinking, whether in sympathy or
in reaction. Likewise in economic matters. The world economy from the eighteenth
century (and probably before) provided Britain with its framework of relative values,
wheat against iron, interest rates against wages.
The point is crucial, to return again to the puzzle, for understanding why the
classical economists were so wrong in their dismal predictions. Landlords, they said,
would engorge the national product, because land was the limiting factor of production.
But the limits on land seen by the classical economists proved unimportant, because
Ippolito 1975
Pollard 1973, 1981a; within Britain cf. Hudson 1989 and Crafts 1989a.
431 Mokyr 1985b: 175
429
430
209
north-west Europe gained in the nineteenth century an immense hinterland, from Chicago and Melbourne to Cape Town and Odessa. The remarkable improvement of ocean
shipping tied Britain to the world like Gulliver to the ground, by a hundred tiny
threads. Grain production in Ukraine and in the American Midwest could by the 1850s
begin to feed the cities of an industrial Britain; but the price of wheat in Britain was constrained even earlier.
Trade, then, was important as a context for British growth. Yet it was not an engine of growth. For the period in question Mokyr makes the clearest case.432 The underlying argument is that domestic demand could have taken the place of foreign demand (Mokyr earlier [1977] had shown likewise that the shuffling of domestic demand
was no more promising). To be sure, Britons could not have worn the amount of cotton
textiles produced by Lancashire at its most productive: cotton dhotis for the working
people of Calcutta would not have become fashionable at the High Street Marks and
Spencer. But in that case the Lancastrians would have done something else. The exporting of cotton cloth is not sheer gain. It comes at the cost of something else that its
makers could have done, such as building more houses in Cheshire or making more
wool cloth in Yorkshire.
In other words, the primitive conviction most people have that foreign trade is
the source of wealth is wrong. Nations, or villages, do not have to trade to live. (The
power of the conviction is shown nowadays by the role of fish exports in the political
economy of Iceland or of exports generally in that of Japan.) Exports are not the same
thing as new income. They are new markets, not new income. They are a shift of attention, not consciousness itself. Not.
The trade, of course, benefits the traders. Although not all the income earned in
trade is a net gain, nonetheless there is such a gain. But—here’s the nub—the gain can
be shown in static terms to be small. One of the chief findings of the “new” economic
history, with its conspicuous use of economic models, is that static gains are small.
Robert Fogel’s calculation of the social savings from American railways is the leading
case (1984, replicated by Hawke in 1970 for Britain with broadly similar results). However essential one may be inclined to think railways were, or how crucial foreign trade
to British prosperity, or how necessary the cotton mill to industrial change, the calculations lead to small figures, far below the factor of fifteen.
The finding that foreign trade is a case in point, with small static gains, can stand
up to a good deal of shaking of the details. Its robustness is a consequence of what is
known informally among economists as Harberger’s Law (after A. C. Harberger, an
economist famous for such calculations). That is, if one calculates a gain amounting to
some fraction from a sector that amounts to again a fraction of the national economy
one is in effect multiplying a fraction by a fraction. Suppose X per cent of gain comes
from a sector with Y per cent of national income. It follows from highly advanced
mathematics (do not try this at home) that the resulting fraction, X times Y, is smaller
than either of its terms. For most sectors and most events—here is the crucial point—
432
Mokyr 1985b: 22-3 and works cited there
210
the outcome is a small fraction when set beside the 1,400 percentage points of growth to
be explained 1780 to the present, or even beside the 100 percentage points of growth to
be explained 1780 to 1860.
To take foreign trade as the example, in 1841 the United Kingdom exported some
13 per cent of its national product. From 1698 to 1803 the range up and down of the
three-year moving averages of the gross barter terms of trade is a ratio of 1.96, highest
divided by lowest (Deane and Cole 1962; Mitchell and Deane 1962: 330); Imlah’s net
barter terms range over a ratio of 2.32, highest divided by lowest (1958). So the variation of the terms on which Britain traded was about 100 per cent over century-long
spans like these. Only 13 per cent of any change in income, then, can be explained by
foreign trade, statically speaking: 100 x 0.13 = 13. Another Not.
Faced with such an argument the non-economists, and some of the economists,
are likely to claim that “dynamic” effects will retrieve trade as an engine of growth. The
word “dynamic” has a magical quality---the economist Fritz Machlup once placed it in
his list of “weaselwords.” Waving “dynamic” about, however, does not in itself suffice
to prove one’s economic and historical wisdom. One has to show that the proffered
“dynamic” effect is quantitatively strong.
For example, one might claim that the industries like cotton textiles encouraged
by British trade were able to exploit economies of scale, in perhaps the making of textile
machinery or the training of master designers. There: a dynamic effect that makes trade
have a larger effect than the mere static gain of efficiency. Not Not.
It may be true. And in fact a smaller cotton textile industry would have been less
able to take advantage of technological change nationally. After all, cotton was unusually progressive. But is the dynamic effect large?
One can answer the question by a thought experiment. If the cotton textile industry were cut in half by an absence of foreign markets 1780-1860 the importance of
cotton in national productivity would have fallen from 0.07 to 0.035. Resources would
have had to find other employment. Suppose that the released resources would have
experienced productivity growth of 0.5 per cent per year (on the low end of the available possibilities) instead of the princely 2.6 per cent they in fact experienced in cotton.
The cotton industry in the actual event contributed a large amount - namely, (0.07) (2.6
per cent) = 0.18 per cent per year - to the growth of national income; this one giant contributed some 18 per cent of the total growth of income per person nationally 1780-1860.
With the hypothetical cut-off of trade the resources would contribute instead (0.035) (2.6
per cent)+(0.035) (0.5 per cent) = 0.11 percentage points a year. The fall in national
productivity change can be inferred from the difference between the actual 0.18 per cent
attributable to cotton and the hypothetical 0.11 per cent attributable to a half-sized cotton industry and the industries its resources went to. The difference is about a 7 per
cent fall in the national rate of productivity change, that is, a fall from (notionally) 1.00
per cent a year to 0.93 per cent a year. In the eighty years 1780-1860 such a lag would
cumulate, however, to merely 9 per cent of national income, Remember that a 100 per
cent change is to be explained. The dynamic effect sounds promising, but in quantitative terms does not amount to much. Another Not.
211
A “dynamic” argument, further, has a serious problem as an all purpose intellectual strategy. If someone claims that foreign trade made possible, say, unique economies of scale in cotton textiles or shipping services, she owes it to her readers to tell why
the gains on the swings were not lost on the roundabouts. Why do not the industries
made smaller by the large extension of British foreign trade end up on the losing side?
The domestic roads in Shropshire and the factories unbuilt in Greater London because
of Britain’s increasing specialization in Lancashire cotton textiles may themselves have
had economies of scale, untapped. (The argument applies later to the worries over “excessive” British specialization in foreign investment, insurance and shipping).
All this Not-saying is not to say that foreign trade was literally a nullity. Trivially, of course, some goods—the banana for the Englishman’s breakfast table was the
popular instance late in the nineteenth century, raw cotton the most important instance
throughout—simply cannot be had in England’s clime. Trade is a conduit of ideas and
competitive pressures, as is best shown by the opening of Japan after 1868. And trade
insures against famine, as the Raj knew in building the railways of India. And much
the License Raj in India was broken down by the opening of the economy for trade. But
a literal closing of trade, foregoing bananas at breakfast, cotton for underwear, wheat in
a famine, is not what is contemplated. The question is, was trade a stimulus to growth
in the simple, mercantilist way usually contemplated in the literature? Not.
 *
*
*
*
It follows from the unimportance of trade---at any rate in explaining the doubling of per capita real income in the eighty years from 1780 to 1860 and especially in
explaining the subsequent explosion on the way to the factor of 15---that parts of trade
were unimportant, too. For example, the slave trade could not have been the cause of
Britain prosperity. Show this briefly. Profits tiny. The impulse to find some
terrible sin at the origins of our Western prosperity is very strong. Admitting the sin relieves guilt.
Imperialism, too, was a part of trade. But imperialism, it can be shown, did not
help the British, or the First World generally. The modern corollary is that the prosperity of the West depends not at all, or at worst very little, on exploiting the Third World. I
know this runs against the grain of much post-imperialist thinking. Thus André
Comte-Sponville, a teacher of philosophy at the Sorbonne, who doesn't claim to know
much about economics, feels nonetheless confident in declaring without argument that
“Western prosperity depends, directly or indirectly, on Third World poverty, which the
West in some cases merely takes advantage of and in others actually causes.” 433
433
André Comte-Sponville, A Small Treatise on the Great Virtues 1996, trans. Catherine
Temerson; New York: Henry Holt, Metropolitan/Owl Books, 2001, p. 89. The
fount of such views in France is said to be the philosopher Maurice MerleauPonty. Raymond Aron complains in his Memoirs 1983, trans. George Holoch,
abridged edition; New York: Holmes and Meier, 1990, p. 216 that when Merleau-
212
Look at the accounting and then look at the numbers.
British imperialism was about protecting the sea routes to India. But India itself, I
claim, was of no use to the average person in Britain. By the time Victoria became Empress
of India the thieving nabobs, Clive of India and all that, were long gone. In 1877 there
no more straightforward opportunities left for thievery by the British. And as rich as
Clive had (briefly) been, his enrichment was trivial in national terms. In fact by 1877 the
British East India Company (and likewise about the same time the Dutch East India
Company check this!) had gone, losing its police powers after the First War of Indian
Independence in 1857, and closing entirely in 1871. A company is presumably a more
focused institution for thievery than a responsible government. The directors of the
Company would have liked to have known of opportunities for super-profits through
Company rule in India during the late 19th century. They themselves had not been able
to find them in time.
Britain in 1877 traded with India. But trade is trade, not thievery. Bombay sent
jute to Dundee and Manchester sent dhotis to Calcutta. Such trade could have been
achieved on more or less the same terms had India been independent or, a more plausible counterfactual, considering the military technology of the European powers in the
18th century, and the disorders of the late Mughal Empire, had become a French rather
than a British colony. And even if the trade with India contained some element of exploitation, which is unlikely, and has certainly never been proven, the trade was tiny by
comparison with Britain’s trade with rich countries like France or the German Empire
or the United States. Give the statistics here: India trade compared with European. Therefore whatever Britain-favoring exploitation there might possibly have
been needs to be discounted by the low share of the India trade in the total.
In short, the average person in Britain got little or nothing out of the British Empire. Yet Queen Victoria loved being an Empress and Disraeli loved making her one, so
imperial India happened.
Acquiring Cape Town was an important part of protecting the sea routes to India, of course, as was messing about in Egypt and so forth. But these ventures were no
more “profitable” than India itself. True, some British investors, and Rhodes himself,
made money out of South Africa. But that does not mean that the great British public
did. The cost of protecting the Empire devolved almost entirely on the British people.
(A century earlier the British had likewise paid for the defense of the first empire, in
what is now the United States; notoriously, the colonials refused to pay as little as a
small tax on tea for imperial defense.) British taxpayers 1877-1948 paid for the half of
naval expenditure that was for imperial defense, a by no means negligible part of total
British national income each year.434 They paid for the Boer War. They paid for the im-
434
Ponty writes in 1947 "as though it were an obvious truth, that 'the moral and material civilization of England presupposes the exploitation of colonies,’ he flippantly resolves a still open question."
The locus classicus for these calculations is Lance E. Davis and R. A. Huttenback,
Mammon and the Pursuit of Empire: The Economics of British Imperialism Cambridge:
Cambridge University Press, 1988.
213
perial portions of World Wars I and especially II. They paid for protection of Jamaican
sugar in the 18th century and protection for British engineering firms in India in the 19th.
They paid and paid and paid.
What were the vaunted benefits to the British people? Essentially nothing of material worth. They got bananas on their kitchen tables that they would have got anyway
by free trade. They got employment for unemployable twits from minor public schools.
Above all they got the great joy of seeing a quarter of the land area on world maps and
globes printed in red.
Economically, it did not matter. Public education mattered a great deal more to
British economic growth, as did a tradition of industrial and financial innovation, and a
free society in which to prosper. Look at the accounting and the magnitudes. Most of
British national income was and is domestic. The foreign income was largely a matter
of mutually advantageous trade having nothing to do with empire—Britain invested as
much in places like the United States and Argentina as in the Empire, and there is no
evidence in any case that returns to investment in the Empire were especially high.435
British imperialism was not, except in its earliest stages, mere thievery. The British
worried in 1776-1783 and in 1899-1902 and in 1947 about the loss of their various pieces
of empire. But is the average British person worse off now than when Britain ruled the
waves? By no means. British national income per capita is higher than ever, and is
among the very highest in the world. Did acquisition of Empire, then, cause spurts in
British growth? By no means. Indeed, at the climax of imperial pretension, in the 1890s
and 1900s, the growth of British real income per head notably slowed.
The same accounting and magnitudes apply to other imperialisms. The King of
Belgium was a notably ruthless thief in the Congo. But to what benefit to the ordinary
Belgian? Did Belgian growth depend on Belgium’s little empire? Not at all. In depended on brain and brawn in coal mines and steel mills at home. Individual Dutch
people, as Multatuli explains in his amazingly early anti-imperialist novel, Max Havelaar
(1860)—compare Uncle Tom’s Cabin—got rich trading spices from the Dutch East Indies.
But the ordinary Dutch seaman or farmer earned what such work earned in Europe in
1860. Would anyone claim that owning Greenland and Iceland and a few scattered islands elsewhere was what made the Danish farmers the butter merchants of Europe?
Did the French as a whole get great benefits from lording it over poor Muslims in Africa
and poor Buddhists in Vietnam? One doubts it. French economic success, like European economic success generally, depended on French education, French ingenuity,
French banking, French style, French labor, French law, French openness to ideas.
Sic transit, I am arguing, all manner of claims that Western wealth is founded on
the despoilment of the East or the South. Rich countries are rich mainly because of
what they do at home, not because of foreign trade, foreign investment, foreign empire,
past or present. If the Third World moved tomorrow by magic to another planet, the
economies of the First World would scarcely notice it. So too in the 20th century: when
after World War II the Europeans lost their empires their incomes per head went sharp435
Edelstein statistics from Floud and McC
214
ly up, not down. The one exception to the loss of empire, Russia, grew more slowly enchained to its Eastern European possessions than it would have had it adopted Western
capitalism in 1945. Look at East vs. West Germany.
That is, we cannot account for the riches of rich countries by reference to exploitation of poor people. This ought to be obvious from the history of South Africa. Keeping the blacks uneducated and the coloreds excluded from certain professions did not
benefit white South Africans on the whole, no more than Arab men on the whole are
made better off by keeping Arab women illiterate and refusing to allow them to drive.
Exploiting people is bad. And commonly (if not always) it hurts the ordinary people alleged
to benefit from the exploitation. Of course it makes some of the exploiters better off. But
these turn out to be mainly a tiny minority, the unusually well-connected or the unusually violent, a few trade unionists in South Africa and the House of Saud in Saudi Arabia. American slavery, which was profitable for those who owned slaves, did nothing
good for the poor whites of the Confederacy, though, alas, like workingclass imperialists in Britain, they thought it did, and therefore flocked to the colors under the command of plantation owners. That people think they are better off by being associated
with an empire or apartheid or slaves does not mean they actually are, says the economist.
What comes out of the economics, in other words, is that on the whole, and time
and again, the attempt to live off poor people has not been a wise idea. Even the rich in
former times, who did live off poor people, were poor by the standard of modern economic growth. As Adam Smith memorably put it at the end of the first chapter of The
Wealth of Nations, “the accommodation . . . of an industrious and frugal peasant . . . exceeds that of many an African king.”436 For 1776 this may in fact be doubted. But now,
imagining the riches in health and wealth of a working person in a modern economy,
and comparing these to the riches extracted in olden times from the poor, it cannot.
If contrary to fact poor people were rich, not poor, and if the exploitation was
all a matter of pass laws and violence, not mutually advantageous exchange, then some
societies could possibly benefit from imperialism. But that’s not what the accounting
and the magnitudes suggest about the British empire, or about apartheid. And even
exploiting rich people is not such a wonderfully enriching idea, as Hermann Göring’s
program of European enslavement showed. Trading with them turns out to be better,
and in fact the more rich countries trade with each other (as they mainly do) the richer
they become. Germany did better in “dominating” (i.e. trading with) Eastern Europe
after 1945 and especially after 1989 than any of its lebensraumische plans of the 1930s
could achieve. We are made better off by having fellow citizens who are well-educated
and well-trained and fully employed, even though we will then have to sacrifice having
plentiful maids and drivers. If exploiting poor people had been such a good idea for the
rich people, then white South Africans would now be—or at any rate would have been
on February 1, 1990—a lot better off than whites in Australia or Holland. They are not,
and were not.
436
citation
215
It is in ourselves, not in our stars or in our foreign relations, that we are underlings. The mass of overlings that modern economic promises does not come from the
zero-sum taking of riches from other people. It comes from inside.
216
Chapter 23:
“Material” Causes are Thus Rebutted
Not demand. Not saving. Not original accumulation, as I have
said, and not slavery, not piracy, not poverty, not enclosures [my
calculations], as the anti-bourgeois theorists alleged; and especially
not what bourgeois economists call "neoclassical reallocations."
To put the wider Not finding in a sentence: we have not so far discovered any
single factor essential to British industrialization. A long time ago Alexander Gerschenkron argued that the notion of essential prerequisites for economic growth, single
or multiple, is a poor one (1962a). He gave examples from industrialization in Russia,
Italy, Germany and Bulgaria which showed substitutes for the alleged prerequisites.
The big banks in Germany and state enterprises in Russia, he claimed, substituted for
entrepreneurial ability. His claim has been much disputed since then. But the British
case provided anyway the backdrop for comparison with other industrializations.
Gerschenkron’s economic metaphor that one thing can “substitute” for another
applies to Britain itself as much as to the other countries. Economists believe, with good
reason, that there is more than one way to skin a cat. If foreign trade or entrepreneurship or saving had been lacking, the economist’s argument goes, other impulses to
growth (with a little loss) could conceivably have taken their place. A vigorous domestic trade or a single-minded government or a forced saving from the taxation of agriculture could take the place of the British ideal of merchant adventurers left alone by government to reinvest their profits in a cotton factory.
Transportation, for example, is often cast in the hero’s role. The static drama is
most easily criticized. Canals carrying coal and wheat at a lower price than cartage, better public roads bringing coaching times down to a mere day from London to York, and
then the railway steaming into every market town were of course Good Things. But
land transportation is never more than 10 per cent of national income - it was something
like 6 per cent 1780-1860. Britain was well supplied with coastwise transportation and
its rivers flowed gently like sweet Afton when large enough for traffic at all. Even unimproved by river dredging and stone-built harbors, Mother Nature had given Britain a
low cost of transportation. The further lowering of cost by canals and railways would
be, say, 50 per cent (a figure easily justified by looking at freight rates and price differentials) on the half of traffic not carried on unimproved water - say another 50 per cent.
By Harberger’s Law, 50 per cent of 50 per cent of 10 per cent will save a mere 2.5 per
cent of national income. One would welcome 2.5 per cent of national income as one’s
personal income; and even spread among the population it is not to be sneezed at. But
it is not by itself the stuff of “revolution.”
Yet did not transportation above all have “dynamic” effects? It seems not,
though historians and economists have quarreled over the matter and it would be
217
premature to claim that the case is settled (for the pro-transport side see Szostak 1991).
A number of points can be made against the dynamic effects. For one thing the attribution of dynamism sometimes turns out to be double counting of the static effect. Historians will sometimes observe with an air of showing the great effects of transport that
the canals or the railways increased the value of coal lands or that they made possible
larger factories—dynamic effects (the word is protean). But the coal lands and factories
are more valuable simply because the cost of transporting their outputs is lower. The
higher rents or the larger markets are alternative means of measuring what is the same
thing, the fall in the cost of transporting coal or pottery or beer.
For another, some of the dynamic effects would themselves depend on the size of
the static, 2.5 per cent effect. For example, if the ‘dynamic’ effect is that new income is
saved, to be reinvested, pushing incomes up still further, the trouble is that the additional income in the first round is small.
For still another, as has already been stressed, the truly dynamic effects may arise
from expensive as much as from cheap transportation. Forcing more industry into
London in the early nineteenth century, for example, might have achieved economies of
scale which were in the event dissipated by the country locations chosen under the regime of low transport costs. The balance of swings and roundabouts has to be calculated, not merely asserted.
Sector by sector the older heroes have fallen before the march of Notting economists and historians. Marx put great emphasis for instance on the enclosure of open
fields, which he claimed enriched the propertied classes and drove workers into the
hands of industrialists. By now several generations of agricultural historians have argued, contrary to a Fabian theme first articulated eighty years ago, that eighteenth-century enclosures were equitable and did not drive people out of the villages.
True, Parliament became in the eighteenth century an executive committee of the landed classes, and proceeded to make the overturning of the old forms of agriculture easier
than it had been. Oliver Goldsmith lamenting the allegedly deserted village wrote in
1770 that “Those fenceless fields the sons of wealth divide,/ And even the bare-worn
common is denied.” But contrary to the pastoralism of the poem, which reflects poetic
traditions back to Horace more than evidence from the English countryside, the commons was usually purchased rather than stolen from the goose.
The result of enclosure was a somewhat more efficient agriculture. But was enclosure therefore the hero of the new industrial age? By no means. The productivity
changes were small, perhaps a 10 per cent advantage of an enclosed village over an
open-field village.437 Agriculture was a large fraction of national income (shrunk perhaps to a third by 1800), but the share of land to be enclosed was only half.438 Harberger’s Law asserts itself again: (1 /3) (1 /2) (10 per cent) = 1.6 per cent of national income was to be gained from the enclosure of open fields. Improved road surfaces
around and about the enclosing villages (straightening and resurfacing of roads went
437
438
McCloskey 1972; Allen 1992.
McCloskey 1975; Wordie 1983
218
along with enclosure, but is seldom stressed) might have been more important than the
enclosure itself.
Nor was Adam Smith correct that the wealth of the nation depended on the division of labor. To be sure, the economy specialized. Ann Kussmaul’s work on rural specialization shows it happening from the sixteenth century onward.439 Berg and Hudson
(Hudson 1989) have emphasized that modern factories need not have been large, yet
the factories nonetheless were closely divided in their labor. Most enterprises were tiny, and accomplished the division of labor through the market, as Smith averred. It has
long been known that metal working in Birmingham and the Black Country was broken
down into hundreds of tiny firms, anticipating by two centuries the ‘Japanese’ techniques of just-in-time inventory and thorough sub-contracting. Division of labor certainly did happen, widely.
That is to say, the proper dividing of labor was, like transport and enclosure, efficient. Gains were to be had, which suggests why they were seized. But a new technique of specialization can be profitable to adopt yet lead to only a small effect on
productivity nationally - look again at the modest, if by no means unimportant, productivity changes from the puddling and rolling of iron. The gains were modest in the absence of dynamic effects, because the static gains from more complete specialization are
limited by Harberger’s Law.
A similar thought experiment shows the force of the argument. Specialization in
the absence of technological change can be viewed as the undoing of bad locations for
production. Some of the heavy clay soil of the midlands was put down to grazing,
which suited it better than wheat. Or the labor of the Highlands was ripped off the
land, to find better employment—higher wages, if less Gaelic spoken—in Glasgow or
New York. The size of the reallocation effect can be calculated. Suppose a quarter of
the labor of the country were misallocated. And suppose the misallocation were bad
enough to leave, say, a 50 per cent wage gap between the old sector and the new. This
would be a large misallocation. Now imagine the labor moves to its proper industry,
closing the gap. As the gap in wages closes the gain shrinks, finally to zero. So the gain
from closing it is so to speak a triangle (called in economics, naturally, a Harberger Triangle), whose area is half the rectangle of the wage gap multiplied by the amount of labor involved. So again: (1 /2) (1 /4) (50 per cent) = 6.25 per cent of labor’s share of national income, which might be half, leaving a 3 per cent gain to the whole. The gain, as
usual, is worth having, but is not itself the stuff of revolutions. The division of labor:
Not.
Geography is still another Not. Some economic historians continue to put
weight on Britain’s unusual gifts from Nature.440 It must be admitted that coal correlates with early industrialization: the coal-bearing swath of Europe from Midlothian to
the Ruhr started early on industrial growth. But economically speaking the coal theory,
or any other geographical theory, has an appointment with Harberger. Coal is im439
440
Kussmaul cite.
E.g. Wrigley 1988;
219
portant, blackening the Black Country, running the engines, heating the homes. But it
does not seem, at least on static grounds, to be important enough for the factor of fifteen. The calculations would be worth doing, but one suspects that they would turn out
like the others.
The claim is that the economists’ static model does not explain the factor of fifteen. It can tell why it did Not happen, a series of Nots, useful Nots, correctives to popular fable and sharpeners of serious hypotheses. But the kind of growth contemplated
in the classical models, embedded now deep within modern economics as a system of
thought, was not the kind of growth that overtook Britain and the world in the late
eighteenth and nineteenth centuries.
One might reply that many small effects, static and dynamic, could add up to the
doubling of income per head to be explained: trade, coal, education, canals, peace, investment, reallocation. No, Not. One trouble is: that doubling, 100 per cent, is not
enough, since in time modern economic growth was not a factor of two but a factor of
fifteen, not 100 per cent but 1,400 per cent. Another is that many of the effects, whether
in the first or the second century of modern economic growth, were available for the
taking in earlier centuries. If canals, say, are to explain part of the, growth of income it
must be explained why a technology available since ancient times was suddenly so useful. If teaching many more people to read was good for the economy it must be explained why Greek potters signing their amphora c. 600 B.C. did not come to use water
power to run their wheels and thence to ride on railways to Delphi behind puffing locomotives. If coal is the key it must be explained why north China, rich in coal, had until the 20th century no industrial growth. The mystery inside the enigma of modern
economic growth is why it is modern.
The classical model from Smith to Mill was one of reaching existing standards of
efficiency and equipment. To put it in a name: of reaching Holland. Holland was to the
eighteenth century what America is to the 20th, a standard for the wealth of nations.
The province of Holland [wrote Adam Smith in 1776] . . . in proportion to
the extent of its territory and the number of its people, is a richer country
than England. The government there borrows at two per cent., and private people of good credit at three. The wages of labor are said to be
higher in Holland than in England, and the Dutch ... trade upon lower
profit than any people in Europe.
WN, 1776:10: 108.
The emphasis on profit at the margin is characteristic of the classical school. The classical economists thought of economic growth as a set of investments, which would, of
course, decline in profit as the limit was reached. Smith speaks a few pages later of “a
country which had acquired that full complement of riches which the nature of its soil
and climate, and its situation with respect to other countries allowed it to acquire”
(1776: Lix.14: 111). He opines that China “neglects or despises foreign commerce” and
“the owners of large capitals [there] enjoy a good deal of security, [but] the poor or the
owners of small capitals . . . are liable, under the pretense of justice, to be pillaged and
220
plundered at any time by the inferior mandarins.”441 In consequence the rate of interest
in China, he claims, is 12 rather than 2 per cent (Smith, incidentally, was off in his facts
here). Not all the undertakings profitable in a better ordered country are in fact undertaken, says Smith, which explains why China is poor. Smith and his followers sought to
explain why China and Russia were poorer than Britain and Holland, not why Britain
and Holland were to become in the century after Smith so very much more rich. The
revolution of spinning machines and locomotive machines and sewing machines and
reaping machines that was about to overtake north-west Europe was not what Smith
had in mind. He had in mind that every country, backward China and Russia, say, and
the Highlands of Scotland might soon achieve what the thrifty and orderly Dutch had
achieved. He did not have in mind the factor of fifteen that was about to occur even in
the places in 1776 with a “full complement of riches.”
Smith, of course, does mention machinery, in his famous discussion of the division of labor: “Men are much more likely to discover easier and readier methods of attaining any object, when the whole attention of their minds is directed towards the single object” (1776: Li.8: 20). But what is striking in his and subsequent discussions is
how much weight is placed on mere reallocations. The reallocations, mere efficiencies,
we have found, are too small to explain what is to be explained.
In a deep sense the economist’s model of allocation does not explain the factor of
twelve. If allocation were all that was at stake then previous centuries and other places
would have experienced what Britain experienced 1780-1860. Macaulay says, in a
Smithian way, “We know of no country which, at the end of fifty years of peace, and
tolerably good government, has been less prosperous than at the beginning of that period” (1830: 183). Yes. But 100 per cent better off, on the way to 1,400 per cent better off?
Not. There had been many times of such peace before, with no such result as the factor
of fifteen.
To put it another way, economics in the style of Adam Smith, which is the mainstream of economic thinking, is about scarcity and saving and other puritanical notions.
In the sweat of thy face shalt thou eat bread. We cannot have more of everything. We
must abstain puritanically from consumption today if we are to eat adequately tomorrow. Or in the modern catch-phrase: there’s no such thing as a free lunch.
The chief fact of the quickening of industrial growth 1780-1860 and its aftermath,
however, is that scarcity was relaxed—relaxed, not banished, or overcome by an “affluent society,” since whatever the size of income at any one time more of it is scarce.
Modern economic growth is a massive free lunch.
In 1871, a century after Smith and at the other end of the period (but not the end
of modern economic growth), John Stuart Mill’s last edition of Principles of Political
Economy marks the perfection of classical economics. Listen to Mill:
Much as the collective industry of the earth is likely to be increased in efficiency by the extension of science and of the industrial arts, a still more
active source of increased cheapness of production will be found, probably, for some time to come, in the gradual unfolding consequences of Free
441
1776: Lix.15: 112; cf. 1776: Lviii.24: 89.
221
Trade, and in the increasing scale on which Emigration and Colonization
will be carried on.
1871: Bk IV, ch. ii. l : 62.
Mill was wrong. The gains from trade, though statically commendable, were trivial beside the extension of industrial arts (“science” means here “systematic thinking,” not, as
it came to mean in English shortly afterwards, and only in English, the natural sciences
alone). The passage exhibits Mill’s classical obsession with the principle of population,
namely, that the only way to prevent impoverishment of the working people is to restrict population. His anxieties on this score find modern echo in the environmental
and family limitation movements. Whatever their wisdom today, the Malthusian ideas
told next to nothing about the century to follow 1871. British population doubled again,
yet income per head increased by nearly a factor of four. Nor did Mill’s classical model,
as we have seen, give a reasonable account of the century before 1871.
Mill again: “It is only in the backward countries of the world that increased production is still an important object: in those most advanced, what is economically needed is a better distribution, of which one indispensable means is a stricter restraint on
population” (1871 : Bk IV, ch. vi. 2: 114). Still more wrong, in light of what in fact happened during the century before and the century after. Mill is unaware of the larger pie
to come—unaware, so strong was the grip of classical economic ideas on his mind, even
in 1871, after a lifetime watching it grow larger. He says elsewhere, “Hitherto it is questionable if all the mechanical inventions yet made have lightened the day’s toil of any
human being” (1871: Bk IV, ch. vi. 2: 116), a strange assertion to carry into the 1871 edition, with child labor falling, education increasing, the harvest mechanizing, and even
the work week reducing.
Mill was too good a classical economist, in short, to recognize a phenomenon inconsistent with classical economics. That the national income per head might quadruple in a century in the teeth of rising population is not a classical possibility, and so the
classicals from Smith to Mill put their faith in greater efficiency by way of Harberger
Triangles and a more equitable distribution of income by way of improvements in the
Poor Law. It should be noted that Mill anticipated social democracy in many of his later
opinions, that is, the view that the pie is after all relatively fixed and that we must therefore attend especially to distribution. That the growth of the pie would dwarf the Harberger Triangles available from efficiency, or the Tawney Slices available for redistribution, did not comport with a classical theory of political economy. Macaulay’s optimism of 1830 turned out to be the correct historical point: “We cannot absolutely prove
that those are in error who tell us that society has reached a turning point, that we have
seen our best days. But so said all who came before us, and with just as much apparent
reason” (1830: 186). The pessimistic and puritanical classical economists, with the pessimistic and puritanical romantic opponents of industrialization, were wrong.
Here is the economist’s way of stating the problem. Think of the output of Stuff
(clothing, food, houses, etc.) and Services (doctoring, teaching, soldiering) in 1780 in
Britain as being measured along two axes (bring back that high-school algebra and ge-
222
ometry, now!). The possibilities in 1780 are a curve along which the actual Britain of 1780
took a point, which we’ll call Self-Sufficiency:
223
Inefficiency, misallocation, opportunities missed, distortions introduced of the
usual static sort are about being inside or on that curve. Note the point Massive
Unemployment: that would be a stupid place to be, since you could get out to the
curve and have more of both Stuff and Services. You can get a little outside it by
trading with foreigners. But only a little outside, to a point like Trade.
Good. Now I’ll tell you why I drew the so-called “production possibility curve”
for 1780 as such a scrunched up little curve in the very corner of the axes: because to
represent Now on the same diagram the amounts of Stuff and Services (averaged) have
to be fifteen times further out. Of course: that’s what being better off means.
Look at the diagram. None of the static arguments, and most of the dynamic, fail
to explain what happened in modern economic growth. No merely static improvement of matters in 1780 or 1700 can come remotely close to the curve of Now.
That’s the intellectual puzzle in explaining this greatest of historical events.
The economist Bryan Caplan has argued recently that the economist and the citizen disagree on four points (Caplan **date, pages). The economist says that markets
work well through the earning of profit, that foreigners deserve as much ethical weight
as we do, that production not “jobs” is the point, and that things are getting better and
better. The average citizen believes on the contrary that the TV market need close regulation, that protection against the “flood” of Chinese goods is a good idea, that a football stadium that “generates jobs” must be a good idea, too, and that the sky is falling.
Caplan argues that an economy governed on Citizen Principles will impoverish the citizens. He worries, as many have since Tocqueville and before, that a democratic politics
can lead to disastrously redistributive policies, such as Peron’s Argentina. That’s right,
it can, and is the worst system that has been tried, except for those others. My point
here is that every economy until Holland and England and the English American Colonies was governed on a similarly self-destructive theory. The theory was the Aristocratic Principle that most people exist for the comfort of a small group of lords and priests
and kings. Oddly, the Aristocratic economic policy and the Citizen economic policy resemble each other: expropriation of profit and the close regulation of markets, xenophobia, irrational projects of public works, and a grim zero-sum belief that one person’s
or one country’s gain is another’s loss. The brief reign of the more genial Economist’s
Principles led to the modern world.
224
Chapter 24:
Nor Was It Nationalism
The danger in the argument so far is the Fallacy of the Immeasurable. It’s not entirely cogent to keep measuring material causes, finding the ones you have managed to
measure to be small, and then conclude that The Cause must be immeasurable. The
method is what John Stuart Mill recommended in his System of Logic, but it is biased towards the immeasurable. What may be missing is an unnoticed but still measurable alternative. Maybe I’ve missed some material cause. Yet a cumulation of Nots does suggest that we are looking in the wrong place. One after another of the proffered explanations has failed. As the last diagram suggests, no case can be made that adding them
all together would change much.
Some of the immeasurabilities that have recently been proposed, however, are
equally unsatisfactory. Liah Greenfeld has argued in an impressive recent book, The
Spirit of Capitalism (2001), that "the factor responsible for the reorientation of economic
activity towards growth is nationalism."442 She summarizes her case towards the end of
a long chapter on "The Capitalist Spirit and the British Economic Miracle" so: "The redefinition of the English society as a nation, which implied the fundamental equality of
all Englishmen, freed economic occupations, specifically those oriented to the pursuit of
profit, from the stigma attached to them in traditional Christian thinking."443 Earlier she
had posited that nationalism is "inherently egalitarian"—we all freeborn English together—and "allows for social mobility."444 Thus the democratic theme in her model.
But more, the very "spirit" of capitalism is raised by nationalism, she writes,
which "invested economic growth with a positive value and focused naturally defused
social energies on it."445 That is, Greenfeld believes that nationalism redoubled the energy of businesspeople. Britain's success against France inspirited them. "Because of
the [British capitalists'] investment in the dignity of the nation, nationalism implies international competition."446 "Empowered by their proud nationalism. . . . they made
their economy boom and provoked [in France, Germany, Japan, for example] wave after
wave of reactive nationalisms. . . . Nationalism was the ethical force behind the modern
economy of growth."447
Greenfeld is quite right to claim that freeing from a peasant/aristocratic stigma
on trade was necessary, and that earlier, as she puts it, "'merchant' was a term of derision in much of Christian Europe [yet not in Northern Italy, the Hanseatic League, the
442
443
444
445
446
447
Greenfeld 2001, p. 1.
Greenfeld 2001, p. 57.
Greenfeld 2001, p. 23.
Greenfeld 2001, p. 24
Greenfeld 2001, p. 23.
Greenfeld 2001, p. 58.
225
Netherlands north and south]; in England it became an honorable title, and commerce
was an occupation of choice for many able and well-positioned people."448
The stigma and derision, I too have argued, has always been a trifle silly. After
all, an ordinary consumer, like you, who looks for the best deal in the Friday market, or
an ordinary worker, like you, who will not accept lower wages than he can get, is a species of merchant. It was a rare member of the senatorial class at Rome, officially barred
from trade, who did not loan money at interest or run a slum apartment house. As John
Wheeler put it in 1601, quoted by Greenfeld, "to contract, truck, merchandise, and traffic
with one another" (Greenfeld notes the anticipation in this of Adam Smith's famous
phrase) is the habit of "both high and low, yet [some] . . . are shamed and think scorn to
be called merchants."449
She is also right to claim that England in the early modern world is the place to
look. "Economic action was visibly reoriented in Northern Europe," she writes, "specifically in England, somewhere around the 17th century."450 She brings no evidence to
bear, though, on the timing of "action," only of thought. That is a worry. Her heroes are
writers: the mercantilists, the economic nationalists of early modern Europe, and especially the Englishmen Gresham, Wheeler, Raleigh, Fortrey, and Defoe. We hear of the
rhetoric of economic ideology, which is good, but not much about the actual shape of
economies.
But Greenfeld is also quite right when she defends Max Weber's argument that,
in her words, "the emergence of a modern economy presupposed—that is, could not
have occurred without—a set of motivations and a new system of ethics."451 It is my
theme, too, and I join Weber and Greenfeld against the economic determinists and the
historical materialists. My difference with Weber and Greenfeld is that I do not think
with Weber that the "new" set was peasantly and Christian, specifically Calvinist, or
with Greenfeld that it was aristocratic and territorial, specifically nationalist. I am
claiming that the new "system of ethics" and "an emergence of new ethical standards"
was bourgeois, townly, and libertarian, right from the start.
In keeping with her mercantilist economics, Greenfeld thinks the spirit of capitalism resides in competition, not cooperation, in economic conquest, not economic dealing. With certain other neo-mercantilists nowadays, such as the historian David
Landes or the economist Lester Thurow, she believes therefore in an economic World
Cup of "competitiveness." She admires the mercantilist Samuel Fortrey's claim in 1663
that England's greatness depended not merely in England's absolute prosperity but, as
she put it, on "its economic supremacy (we would call it competitiveness) relative to
other nations."452 "Competitiveness, " she writes, becomes "a measure of success in eve-
448
449
450
451
452
Greenfled 2001, p. 57.
Wheeler 1601, quoted in Greenfield 2001, p. 40.
Greenfeld 2001, p. 15.
Greenfeld 2001, p. 16; the phrases quoted just below are from the same paragraph.
Greenfeld 2001, p. 45.
226
ry sphere. . . and commits societies which define themselves as nations to a race with a
relative and therefore forever receding finish line."453
At the end of her survey of the pamphlet literature of mercantilism before Adam
Smith demolished it she praises Defoe's "clarity of vision—of nations racing against one
another for economic supremacy."454 Defoe's metaphors of the economic race are "very
suggestive" and "elucidate [the] nature" of England's commercial "supremacy," which
she dates from 1690. Commerce, he wrote, "might be said to begin like the starting post
or place of a race, where all that run set out exactly upon an equality, whatever advantage is obtained afterwards being the effect of the strength and vigor of the racers."
England's outdoing of all the nations in the world began "when standing upon the
square with the rest of the world England gave itself a loose and got the start of all the
nations about her in trade."455
A race is a zero sum game. If Britain exceeds France in the league table of economics growth, then Britain wins, and France loses.
Such race-ism, just incidentally, brings to mind the other meaning of the word, a
nascent racism. Race is not Greenfeld's explanation, certainly, though it is not far from
the minds of some of her allies. Defoe boasted that a naked Englishman (Robinson Crusoe, for example) could "beat the best men you shall find in the world."456 And Benjamin Franklin, her quotes from him. In less boastful terms David Landes has recurred to 19th-century theories of the superiority of the ancient Germanic community to
explain European success since the 16th century: quotes from my review of
Landes.
Gain, a rise in status, racing for a finish line is not capitalistic only. And capitalism is not about a race. I argued in The Bourgeois Virtues that the talk of "competition"
arises from a masculine nostalgia for aristocratic games, such as war, and is not especially capitalistic, contrary to much chatter on the subject.457 As the anthropologist Alan
Page Fiske argues in detail, "Market Pricing [his term for the last of four elementary
forms of human relations] need not be a race." "Competition means trying to outdo
others, but participants in a Market Pricing interaction may not be concerned about
whether they come out ahead. . . . A person may seek a high benefit to cost ratio [that
is, may seek profit in a trade of cotton cloth for port wine] without regard to how others
fare, . . . never comparing himself to anyone else at all" (Fiske 1991 [1993], p. 397). In
fact that's the normal case. When you offer a dollar to your newsagent or offer yourself
for employment at KPMG you have in mind getting today's paper or getting the salary
from consulting work to get the paper. You don't think, "Aha! I now have today's paper, whereas that idiot Jones does not" or "Yeah! Here I am beating out all the other
consultants in the world in getting a dollar to buy the paper!"
453
454
455
456
457
Greenfeld 2001, p. 23.
Greenfeld 2001, p. 52.
Defoe, DATES, p. NNN, quoted in Greenfeld, p. 51.
Defoe DATES, Complete English Tradesman, p. NNN [about 140 or so], quoted
in Greenfeld 2001, p. 55.
McCloskey 2006, pp. 243-244.
227
Beyond the mercantilist assertions in the pamphlet literature, Greenfeld offers
little evidence for her claim that nationalism inspirited the capitalists, leaving them
"tense with collective economic ambition," "inspired . . . to incessant activity."458 She
stays at the level of a national character, a personality called "England" or "Britain" who
has loves and hates, ambitions and fears: it is to "the original, English, nationalism, to
which we owe the forward aspiration of modern economy and its yearning [note the
personalization here] for ever greater material power."459 Greenfeld gives no example
of a British merchant letting his enthusiasm for British power get in the way of his private goals. She gives many examples of various scribblers justifying merchants in nationalist terms. But no actual merchant is shown in her book makes such a claim, and
especially no actual merchant showing in his behavior that he in fact has substituted
public gain for private. {check to make sure, especially in her Japanese chapters; use Hancock to show absence in actual 18th-century British merchants]
And why would not love for some smaller polity than the nation work just as
well? I’ve noted already that the Italian word campanilismo, that is, parochialism, means
the loyalty to parish within the shadow, or at any rate the sound, of the local bell tower.
To this day Siena is divided into cantrade, neighborhoods sponsoring a horse and rider
in the twice-yearly Palio. Your contrada gives you the pride of a little nation. The pride
of a Venice or a Swiss canton gives it, too, and can support economic venturing. Greenfeld praises English mercantilism of the 17th century. But city councils in Lincoln or
London probably heard identical arguments for keeping business at home in the 13th
century. Were the national boundaries of Europe in 1914 or in 1939 somehow economically stimulating? What is so desirable, economically, about a gigantic German Reich or
a gigantic Soviet Union?
Perhaps large nations improve economies. Largeness itself might aid the gathering of large capital sums, for example, though it was notorious in England that the capital market in the 16th and 17th century was local. And later when part of it—the part financing the nation's wars—became national it also became international, making national boundaries irrelevant. Dutch and French investors financed British navies to
fight against . . . the Dutch and the French. During the Napoleonic Wars British investors and exporters continued to deal in Paris. It would be an astonishing accident if
what economists call the "optimal currency area," to take one of various possible concepts—the optimal bond-market area, the optimal iron-making area, the optimal insuring area—happened to match the borders of Britain in 1776 or of Germany in 1871.
Or large nations could improve the economic policy, bringing the wisdom of a
Colbert or a List to bear on a wider field than merely local regulations. A French nation
could lower internal tariffs—although in fact internal tariffs harried French merchants
well into the 18th century check. Or perhaps large nations have wise regulations of
quality in production, wiser at any rate than those of Coventry or Lyon on their own—
458
459
Greenfeld 2001, pp. 50, 57
Greenfeld 2001, p. 24.
228
though the mercantilism which Greenfeld admires was local politics writ large. Perhaps large nations encourage the winning industries rather than propping up the losers—with exceptions such as French prohibitions on Indian cotton cloth in the 18th century and the Common Agricultural Policy in the 21st,
Against such claimed advantages should be set the disadvantages of adventurism in pursuit of glory, an adventurism encouraged exactly by the largeness of nations.
Napoleonic France or Hitler's Germany achieved glory that smaller nations could not
aspire to. France unification dates yielded a Louis XIV, glorious as the very sun but
embroiling Picards and Gascons and Normans pick provinces late absorbed into
France in his wars of intervention. Georgian Britons worried fix sentence the threat
of their kings and ruling class to waste money in pursuit of empire, or, worse, to bring
the armies home.
Greenfeld knows all this, and acknowledges it. That is, she acknowledges that
nationalism has had a down side. For example, she emphasizes the egalitarianism that
goes along with nationalism. {quotes} True enough. If we are all British or German
together we are. . . well. . . all British or German. But fascist nationalism involves an
egalitarianism quite different from that of liberal nationalism in, say, its full-blown
American form. That's the downside: we are all equal in our craven subordination to Il
Duce or Der Fuhrer, and gladly accept it because we are after all proudly nationalistic
about being Italiani or deutcher Volk. In the first of Fiske's elementary forms, "Communal Sharing," "the individuality of separate persons is not marked."460 Communal Sharing is the belonging/not of an infant's family, or a patriot's nation. Fiske's third form,
"Equality Matching" (he offers persuasive evidence that the forms are stages in human
ethical development), is "an egalitarian relationship among peers who are distinct but
coequal individuals, . . . separate but equal" (Fiske 1991, pp. 14-15). In Fiske's terms
what Greenfeld is claiming is that a rhetoric of Communal Sharing leads to a rhetoric of
Equality Matching. Being an Englishman leads to the notion that you are free-born. As
Fiske argues with overwhelming evidence from anthropology and human development, no, it does not, not always or even usually. Like as not it is paired instead, as in
fascist nationalism, with Fiske's second relation, the especially vicious form of "Authority Ranking" that haunted Tocqueville, a Louis Napoleon standing over an equal body
of undifferentiated, but equal, subjects. her talk of different kinds of nationalism. Why not just call it "British liberties"?
More here on Greenfeld
Quoting Mokyr, 2007: "The problem, of course, is that the Dutch not only did not have
an Industrial Revolution when Britain did, theirs was unusually late (Mokyr, 1976, 2000;
Van Zanden, 1993; Van Zanden and Van Riel, 2004)." I wonder why people are so exerFiske 1991, p. 13; he means "marked" in the grammatical sense, that is, "specially acknowledged".
460
229
cised by the alleged decline, and the lateness. It comes from thinking always in national
units, doesn't it? Suppose we simply viewed Holland (even in the strict sense) as a region of the wider region of progressive northwestern Europe, a region that specialized
in finance and trade? Then it would be seen rather as London is---we do not get out the
lyres and sing tragic songs about the "failure" of London to industrialize until the late
19th century, or really the 20th century, do we? Yet in 1830, say, everyone thought of industrialization as something northern, something in Lancashire and Yorkshire, with a
bit of Scotland and the Midlands. Mokyr asks sagely, "Did the institutional experience
of the two nations diverge at some later point? Or is the model simply incomplete? The
timing, too, leaves some gaps: why was there so little economic progress between 1690
and 1760?" I think the worry is misplaced. True, the Dutch were very aware of their
"lagging." But so were the southern English. Neither were justified.
230
Chapter 25:
Nor Institutions:
Against North and Braudel
Douglass North (b. 1920) is an astonishing economist who has repeatedly reinvented himself. The heir to an insurance fortune, merchant seaman in the War, apprentice photographer to Dorothea Lange, fishing buddy of Perry Como, in his youth he was
a Marxist, but became from the study of economics an advocate of capitalism. As a
young academic at the University of Washington in the 1950s he was one of the chief
entrepreneurs of the so-called “new” economic history, that is, the application of economic theory and statistics to historical questions, such as how regional growth happened in the United States before the Civil War. For this he was in 1993 awarded with
Robert Fogel the Nobel Memorial Prize in Economic Science (the Prize citation, incidentally, was chiefly my work). I am a student of his student John Meyer, and am
therefore one of North’s numerous intellectual grandchildren.
North’s pioneering study of ocean freight rates from the 17th century on (North
1968) led him in the 1970s to ponder the evolution of what had in economics come to be
called “transaction costs,” that is, the costs of doing business. Moving cotton from Savannah to Liverpool entails transportation costs, obviously. Less obviously---it was the
thought of the economist Ronald Coase---moving a piece of property from Jones to
Brown entails transaction costs. By North’s own account in 1966 he had decided to
switch from American to European economic history. With colleagues like Robert
Thomas, S.N.S. Cheung, Barry Weingast, and John Wallis, North developed a story of
the “rise of West” focusing on the gradual fall in such costs. Since the 1980s North has
argued that Western Europe in the 18th and 19th centuries benefited uniquely from good
institutions that held transaction costs in check, such as Britain’s unwritten constitution
of 1689 and the United State’s written one of 1789.
North defines institutions as “the humanly devised constraints that structure political, economic and social interaction” (North 1991, p. 97). The word “constraints”
here matters a good deal, because he means what economists mean by it. North is an
economist right down to his wing-tipped shoes. Consumers and producers, economists
say, maximize utility “subject to constraints,” such as the laws against murder and theft,
or the regulations of the Internal Revenue Service, or the customs of Bedouin hospitality, or the Ford Way of doing business. In other words, the main character in North’s
story is always Max U, Homo prudens---not Homo ludens or Homo faber or Homo hierarchus. The “institutions” stop people from doing certain things, such as theft from the
local grocery store or turning away hungry travelers. They are barriers, good or bad.
From the individual’s point of view they fall from the sky.
North does not notice that other observers of society do not entirely agree with
the economist’s metaphor of “constraint.” He much admires, for example, the anthro-
231
pologist the late Clifford Geertz. It’s hard not to. But when he quotes Geertz in support
of a notion that in caravan trade, such as in Morocco around 1900, “informal constraints
[on, say, robbing the next caravan]. . . made trade possible in a world where protection
was essential and no organized state existed,” he misses the non-instrumental, nonMax-U language. The toll for safe passage in Morocco, Geertz wrote, was “rather more
than a mere payment,” that is, a mere monetary constraint. “It was part of a whole
complex of moral rituals, customs with the force of law and the weight of sanctity.”461
“Sanctity” doesn’t mean anything to North the economist, who in his latest book treats
religion with a contempt worth of Christopher Hitchens. Or rather religion means just
another “institution” in his subject-to-constraints sense, that is, a set of rules. It is not
about holiness or the transcendent, not about faithful identity, not about giving lives a
meaning through words. It is rules about doing business, whether the business is in the
market or in the temple. North asserts, for example, that in a pre-legal stage “religious
precepts . . . imposed standards of conduct on the [business] players” (1991, p. 99). The
world-view that goes with faith is not his concern. More, especially on his sneers
at religion.
In any event, with the Max U character in mind North believes he has equipped
himself to explain the modern world. The axiom is that “economic actors have an incentive to invest their time, resources [in the economist’s broad sense as means for
achieving ends], and [personal] energy in knowledge and skills that will improve their
material status.” The question, North observes, is whether Max U’s “investment” will
be in swords with which to steal money or machines with which to spin cotton. Both
investments improve Max U’s material status. Which path will he choose? North puts
his finger on the main problem facing political economy from the caves to the 18th century: “economic history is overwhelmingly a story of economies that failed to produce a
set of economic rules of the game (with enforcement) that induce sustained economic
growth” (1991, p. 98). That is, before the 18th century Max U saw his best chance in violence or influence, not in voluntary exchange. One is reminded of the Norsemen, who
when they approached a coast decided whether to kill the natives or to trade with them.
They were largely indifferent between the options: whatever maximized material utility. Thus A. A. Milne’s “Bad Sir Brian Botany” who “went among the villagers and
blipped them on the head,” but received his comeuppance, and became “quite a different person now he hasn’t got his spurs on,/ And he goes about the village as B. Botany,
Esquire,” not blipping on the head.
In fact the choice to escape from growth-killing “rent seeking”---investing in
swords or in influence at Court rather than in good machinery to make things and good
organizations to administer the machinery---happened in history only once, in northwestern Europe, 1600 to 1848. Why?
North’s answer resembles that of his friend the great French historian Fernand
Braudel (dates; North among his other accomplishments is a francophone and a wine
connoisseur). Braudel argued that out of local markets came, with the expansion of
461
Geertz 1979, p. 137, quoted in North 1991, p. 104, italics supplied.
232
trade, the age of high commerce; and that out of the age of high commerce came, with
the expansion of trade, the industrial revolution. More on Braudel. Likewise North
writes, “long distance trade in early modern Europe from the 11th to the 16th centuries
was a story of the sequentially more complex organization that eventually led to the rise
of the western world” (North 1991, p. 105). Braudel was less celebratory than North has
been about this progress from local to world-wide to industrial capitalism. He retained
the French intellectual’s suspicion of les bourgeois.
But North and Braudel agree on the machinery involved. Expansion fueled it,
they say. Foreign trade is their engine of growth. “Increasing volume obviously made
such institutional developments [as modern capital markets] possible” [North 1991, p.
106]. “The size and scope of merchant empires” made arm’s length transactions possible (p. 106). “The volume of international trade and therefore . . . economies of scale”
made for standardization and information (p. 106). The result was a virtuous spiral of
economic forces: “the increasing volume of long distance trade raised the rate of return
to merchants of devising effective mechanisms for enforcing contracts. In turn, the development of such mechanisms lowered the costs of contracting and made trade more
profitable, thereby increasing its volume”(p. 197). To use the jargon of the recent mathematical “theories of economic growth,” the growth is “endogenous,” internally generated. Growth leads to growth, which leads to. . . growth.
Most of North’s story tells of routine search for better institutions. The search is
“routine” because it is a pretty much predictable result of investment. If you reorganize
at great expense the docklands of London, you or your heirs will reap returns. Ships
will get in and out of port with less delay. Ship stores will be more readily available.
Information about cargoes coming and going will be cheaper. Loss in storage will be
lower. Doubtless you might make a mistake, and over- or under-invest. But the prospect of net return, while not perfectly predictable, is what motivates you. The improvement is like the draining of the Haarlemmermeer, 1848-1852, one of the great projects in Dutch engineering. Cost: steam engines. Benefit: farmland.
There are two problems with routine investment as an explanation of the modern
world. For one thing, routine, incremental investments bring routine, incremental returns. North writes that his Max-U merchant “would gain. . . from devising ways to
bond fellow merchants, to establish merchant courts, to induce princes to protect goods
from brigandage in return for revenue [note the quid pro quo], to devise ways to discount bills of exchange” (1991, p. 109). Now it is possible---and was indeed the usual
way of thinking in economics from Smith in 1776 through W. W. Rostow in 1960, as I
have noted--that we grew as rich as we are by simply piling brick on brick, or contract
on contract. After all, that’s how we as individuals save for old age, and it’s what we
urge on our children. But no one, to repeat, grew very rich by routine investment, and
neither did Western society 1800-2008. The investment was a good idea, just as the
draining of the Haarlemmermeer was a good idea. But the astounding growth after
1800 needs an astounding explanation.
And that’s the other problem. If routine investment explains the modern world,
why didn’t the modern world happen in ancient times? Routine is easy. That is why it
233
is routine. Ancient China was peaceful and commercial for decades and sometimes
centuries at a time. The ancient Roman Empire’s disturbances were usually minor matters of palace uprisings or frontier battles. The ancient Egyptians had command over
resources and stable regimes. If growth produces growth, which produces growth,
why did modern economic growth wait to happen in the 18th, 19th, and 20th centuries,
and then begin in a turbulent corner of Europe?
North’s answer is the good institutions I mentioned, such as the settlement of
1689 in England. Some of these too he wants to make endogenous, caused by the very
growth. The Max-U merchant’s “investment in knowledge and skills would gradually
and incrementally alter the basic institutional framework” (p. 109). But if they are endogenous, as against an “exogenous” (the Greek means “outwardly generated”), then
again why didn’t the same institutional changes happen in Egypt under the pharaohs,
or for that matter in Peru under the Incas?
In the circumstances of Europe as it actually was, furthermore, there is a North
Gap. North praises a “credible commitment to secure property rights” (p. 101). Certainly no economy can prosper in which a Bad Sir Botany can go around blipping people on the head and seizing whatever he wishes. But much of Europe—or for that matter much of China or India---had credible commitments to secure property rights in the
13th century.462 Fredrick Pollock and F. M. Maitland’s great book of 1895 was The History of English Law before the Time of Edward the First. They showed that by 1272 English
common law was firmly in place---though of course the endogenous elaborations, such
as statutes against perpetuities, remained to be accomplished.
North also praises “laws permitting a wide latitude of organizational structures,”
such as incorporation laws. But general incorporation laws were only passed in the
middle of the 19th century, and were taken up very slowly. By 1900 there were only N
registered companies in England. And so the North Gap is 600 years. One cannot explain the exceptional ingenuity of northwestern Europe 1600-1848 with legal developments that happened centuries before or decades after.
One way of getting around the North Gap is emphasizing the modern state as a
source of growth. North would then join with Liah Greenfeld in elevating nationalism
to a cause of modern economic growth. “The state,” he claims, “was a major player in
the whole process” (1991, p. 107). But the state can turn in a moment into a Frankenstein’s monster, and repeatedly has, as North understands and Greenfeld sometimes
appears not to understand. North nonetheless puts faith in “the extent [to which] the
state was bound by commitments that it would not confiscate assets” (1991, p. 107). But
capitalists in the law-abiding, capitalistic United States were haunted in the 1930s by
Roosevelt’s gestures towards confiscation, which gained force by occurring in a world
in which communist or fascist states had done just so (Higgs date). And in 1948 check
the very home since 1272 of credible commitments to secure property rights, England,
nationalized steel, health services, etc. get. In his 1991 essay North has a canny section
describing the different fates of the lands “north and south of the Rio Grande (p. 110).
462
Clark 2007 is good on this, pp. 10, 212.
234
“The gradual country-by-country reversion to centralized bureaucratic control characterized Latin America in the 19th century” (p. 111). Yes. The nation state has by no
means always been good news for economic growth, and it is doubtful that Greenfeld is
correct to credit the Good Nation State with modern economic growth. True, abstaining
from violating property rights through seizing or taxing all the gains from trade is a
necessary condition for any economic growth at all. Witness Zimbabwe in 2007. But
refraining from catastrophic intervention in the economy is not the same as being “a
major player in the whole process” in an admirable sense.
In his brief “Autobiography” for his Nobel prize (1993) North writes, remarkably, that “Individual beliefs were obviously important to the choices people make, and
only the extreme myopia of economists prevented them from understanding that ideas,
ideologies, and prejudices mattered. Once you recognize that, you are forced to examine the rationality postulate critically.” Unfortunately he became persuaded that “one
simply cannot get at ideologies without digging deeply into cognitive science in attempting to understand the way in which the mind acquires learning and makes choices. Since 1990, my research has been directed toward dealing with this issue.” It is
puzzling why he would go from doubting Max U in economics to adopting another
form of Max U in psychology. I suppose the hold of “scientific” methods on men of his
generation overwhelms his common sense. My humanism riff here on him, in
the book. North believes that one can achieve “an understanding of . . . how individuals make choices under conditions of uncertainty and ambiguity” by the study of what
he calls “brain science.” As a scientific program this seem doubtful, at any rate for the
next couple of hundred years. In an Addendum in 2005 he writes, “I have gone much
more deeply into cognitive science and attempted to understand the way in which the
mind and brain work and how that relates to the way in which people make choices
and the belief systems that they have. Clearly these underlie institutional change and
therefore are a necessary prerequisite to being able to develop a theory about institutional change.” And the chemistry of proteins and the laws of quantum mechanics underlie institutional change as well, and therefore are a necessary prerequisite to a theory
of institutional change.
North’s uniquely irritating recent book on these matters can be summarized
harshly as follows, as though by the great man himself:
Institutions, defined so that they are all of culture, are the place to
look. In looking we should follow meekly after the 'brain scientists,' who are much smarter than we historians about history. I've
not actually their work, but it’s pleasant to think of myself as a
Senior Scientist in company with all these smart people over in
brain science. We should disdain the humanities and religion,
since the silly people practicing such rubbish are not brain scientists: what did Maimonides or Luther, Shakespeare or Goethe,
know about human nature? We should not look closely into how
actual institutions have worked, and should read little in history
and, as I said, nothing in literature. Why read actual historians
when there are still popular articles in Discover to read about brain
235
science? Then we should repeat all this every three pages, over
and over and over again. After all, I am a Nobel Laureate, which
means not having to listen to anyone else.
Biggest problem: p. 97f on Max U.
I said “harshly.”
Finish it off here.
*
*
*
*
Here a still disorganized treatment of Braudel:


Fernand Braudel's astonishing product of his old age, full title, and especially
volume 2, The Wheels of Commerce.
Throughout Wheels Braudel admires markets and disdains what he calls "capitalists." [give numerous examples of both to prove].
It gradually becomes clear [arrange the quotes so it does so] that what he means by a
"market" is the routine provisioning of a society. One goes to the Norderkirk market on
Saturday in Amsterdam expecting to buy cheese or broccoli for a little less than the two
nearby Albert Hijn supermarkets charge. One does not expect enormous savings, and
neither do the stall owners expect enormous profits. The provisioning is routine, and
profits as Albert Marshall put it in Principles of Economics (date) is "normal."
By contrast to the honest cheese vendor by the Norderkirk, or by contrast for that
matter to the honest if more fancy and more convenient and more expensive Albert Hijn
on Haarlemmerdijk [get right], a "capitalist" in Braudel's scheme makes big profits.
The profits are abnormal, the "quasi-rents" as Marshall called them, the profits of the
short run before entry brings normality back.
Braudel's capitalist makes the quasi-rents by Mafia techniques. He corrupts governments. Give French examples, and Smith's warnings. He organizes monopolies. Again, Braudel and Smith example. To defend his trading post in [African
example from Hancock], his abnormally profitable turf, he is willing to engage in
shocking violence, shocking at any rate to those who faced European imperial commerce 1600-1848,]. He eagerly leaps into any new opportunity to buy very low in, say,
[give Braudel example from East] to sell very high, N times higher, in Amsterdam.
He sneers at the suckers who work 9:00-5:00 for merely normal profits. He's a crook, a
player, a wise guy. No wonder Braudel doesn't love such a "capitalism." Who could
love Tony Soprano, really?
Braudel argues that peddlers 1100-1789 slowly become shop keepers and that the
merchant fairs such as Champagne's slowly became warehousing entrepôts like Genoa
or Amsterdam. Such developments, he says, were routine matters of population density and the cost of transport. Before Germany's population boomed in the 16th century,
236
the economical way to sell ribbons to Germans was by peddling, wandering from village to village or farm to farm in the style of Oklahoma or Chaucer's wandering merchant. Denser population makes it worthwhile for a peddler to settle in town. The fairs
that had in medieval times services developed into the warehouses of Amsterdam—
able in NN, Braudel reports, to hold nine years worth of Dutch grain consumption, had
that been their main use (it was not: it was to hold the grain, lumber, cloth, spices consumption of all western Germany). The warehousers—the great merchants of Holland—were able to settle down, and not dust their feet in twenty fairs a year, because
the Dutch fluyt, broad of beam and light of crew, cut costs of shipping between the Baltic and the North Sea. Such changes were reversible[if true:] The Thirty Years' War cut
the population of Germany by a third and the peddlers once more hit the road.
One by one the little retail peddlers and the big wholesale merchants settled
down, and no "capitalist" profit ensued.
Fernand Braudel was very far from being a Marxist, at any rate by the standard
of, say, his contemporary Sartre or the next generation, such as Louis Althusser. But
like us all he imbibed Marxist ideas about how the economy functioned, echoing
through followers of Marx like Karl Polanyi or even heavy revisionists such as Max
Weber. You can't avoid Marxist ideas any more than you can avoid Darwinian or
Freudian ideas. I can't, either. They're part of the rhetoric of the age, commonplaces.
Braudel distinguished three levels of economic life, the "material life" of Volume 1, etc.
The line between the market and the capitalists is written in ethics: the capitalists cheat,
and because they are big-time cheaters they get ennobled rather than hung. "Mr. Moneybags" was Marx's indignant characterization of such behavior.
What Braudel gets very wrong because of his Marxoid rhetoric is his claim that
there is line between normal markets and super-normal capitalism. No, there is not. I
do not mean simply that there's no bright line. I mean that there's no line at all. Market
participants are capitalists. You are, for example. True, you don't have ScroogeMcDuck amounts of moneybags to back your investment ideas—at any rate until you
can persuade Scrooge to invest. But when you bought your home, or "invested" in a fur
coat against the Chicago winter, you were engaging in the same activities as the masters
of high finance. Buying low and selling high, expecting the capital gain on your condo
to finance your retirement home in south Texas, expecting the fur coat to yield "profits"
in warmth over many winters to come, runs all markets, haute or petite.
The analogy extends even to the misbehavior that Braudel assigns to the capitalist sphere. {everyone appeals to govt. True, oil executives granted numerous opportunities to chat up Vice-President Dick Cheney are going to do better, probably, than a local store owner complaining to her alderman that the opening of a WalMart will ruin
her. But there's no difference in principle—or, adjusting for scale, in practice—between
the two cases of lobbying. etc.
Alertness, not investment or corruption, is the heart of any successful economy.
Kirzner talk. Examples from early modern.
237
Braudel's vision is of a routine world of normal profits. Economists call it the
"steady state," [Smith's phrase]. It is not just normal and steady. It is stagnant. Innovation, the way modern capitalism has made us all rich, depends not on bribery, violence,
and cheating. It depends on alertness. That is, it depends on noticing—and using by
the exercise of internal and external persuasion, a necessary supplement to Kirzner's
story—opportunities for super-normal profit. One can notice that the booming South
Loop could really use a high-end grocery store, such as [give Chicago name of place on
Erie]. That will make NNN profits in future years worth as a capital sum now, say,
$1,000,000 (I offer the advice to NNN gratis, and have a suspicion that my advice is
worth just what I charge). It's pocket change by the standard of big capitalists like Donald Trump. But it's nonetheless capitalism, and results, as the Donald's first big realestate project in Manhattan did, in supernormal profits until the competition wakes up,
too.
Something happened in the rhetorical world of Europe, during the 17th century
in Holland and England, in the 18th century in Belgium, Scotland, and the English colonies in North America, in the very early 19th century in France, and so forth, that made
alertness explode.
The Marxoid vision attributes super-normal profit to large capital accumulation
and to outrageous behavior. Neither is correct. On the whole you make a little or big
fortune by alertness, not by theft, at any rate in a well-ordered community of laws.
Clive of India, shortly before killing himself, defended his thefts so. . . . quote.
On the other hand, Braudel had one important fact right, which some of his fellows—Weber, for example—did not. Routine behavior yields routine profits. Braudel
quotes Weber on sobriety, etc. Weber called it Protestant behavior—though he would
admit that it was praised in numerous handbooks of proper business behavior by undoubted Catholics in northern Italy two centuries before the Calvinists got hold of the
idea. But Braudel knows that sobriety, etc. does not yield supernormal profits.
Yet on the whole Braudel is an orthodox Marxoid—a rhetoric, I emphasize, he
shares with most historians of the periods before and during the Industrial Revolution.
He believes that the key to capitalism is the accumulation of profits. The "free financial
force" (Trace origin) stood ready then to shift its Mafia-style attentions to manufacturing
when that rather than long-distance trade in spices and chinoise was the place to make
supernormal profits.
I've said why the "original accumulation" part of this way of narrating the birth
of the modern is wrong. But the other half is wrong, too. It's not—pace Marx—the surplus value stored up by Mr. Moneybags that propels modern capitalism. Such profit is
merely the hope tempting to the imagination. Profit pairs with productivity. Normal
profits are earned not by exploitation but by alertness to the right way of doing business—running a grocery store, say—and super-normal profits are earned by superior
alertness. The piled-up alertnesses have made us rich. The Astors and the Carnegies
make the money in the first generation by alertness in the fur trade or in steel manufacturing. (And with an occasional but well-placed bribe, it must be admitted; but remember that this is no different from the Chicago restauranteur paying off the health inspec-
238
tor, small-time.) But when everyone figures out how to get beaver or steel, the profit
goes back to normal, and we are left with cheaper beaver and cheaper steel.
239
Part 4:
Bourgeois Rhetoric Does the Work
240
Chapter 26:
It Was Unexpected Technology,
So We Need New Economic Models
Virtues caused commerce. Endogenization of ethical change. A new
humanistic economics. The outcome was the greatest change in the human condition since the invention of agriculture, the freeing of billions of
people from poverty.
Another way to see the problem with conventional economic thinking about the
industrial revolution is to diagram the three strands in economic thinking since the
mercantilists:
Members
Schools
Mandeville,
Malthus,
Keynes,
Galbraith
Demand-side
mercantilists
Smith,
Ricardo,
Solow
Supply-side
classicals
Franklin,
Creativity
Schumpeter,
beyond
Hayek. Kirzner prudence
Springs
Virtues
Outcomes
of gain
Opportunities
Prudence
Modest rise of income
for employment and Justice
from trough to
peak of a single
business cycle
Saving;
reallocation
Liberty
Prudence
Modest rise of income
and Temperance
peak to peak
in improved e fficiency
Hope
and Courage
Gigantic explosion of
income
1780-present
The first two have failed to explain what we want to explain. They cannot account even
for the doubling of British incomes per head 1780-1860 in the teeth of rising population
and a long French War. And especially they cannot account for the factor of 15 or 19 or
whatever stunning figure applies to the largest social change since the hunter-gatherers.
To account for the startling growth of income before 1860 and the still more startling growth after 1860 it would seem that we must let our economic models expand, to
that third row of Franklin, Schumpeter, Hayek, Kirzner, and beyond. That economists
have not explained modern economic growth is indeed something of a scientific scandal, although economists are not the only ones to blame. A hundred times more funds,
perhaps a thousand times more, have been spent on mapping distant galaxies or mapping the genes of E. coli than on explaining the economic event that made the telescopes
and the microscopes for the mappings possible.
241
Some economists, true, have recently turned back to questions of economic
growth, questions neglected for some decades by most non-historical economists. They
have tried on the blackboard to modify the economic models to fit what is by now two
centuries of growth, building especially on the speculations in the 1920s by the American economist Allyn Young about economies of scale. But the “new growth theorists”
have not read more than a page or two of economic history or the history of economic
thought, and so repeat the mistakes of earlier generations of economists, though exhibiting admirable skill at making up toy models.
The temptation in theorizing is machinery fetishism. Since the classical economists (excepting the master, Adam Smith, who had a better understanding)—for example Marx—the economists have tried to make the making of machinery into the machine for development. You see that your neighbor has a bigger car and a bigger house
than you do, and the factory he owns has bigger machines than your own modest
workshop. It is natural to conclude that if you could only get your hands on his bigger
machines you, too, would be a big figure the neighborhood.
William Easterly notes that for half a century after the Second World War the
theorists and practitioners from the West, trying to help the economies of the East and
South, indulged in machinery fetishism. The idea was that machines yield income.
Obviously the average British railway has more capital, taken to be equal to machinery,
than the average Indian railway. (By the way, this is not as obvious as it looks, since the
British engineers who laid out the Indian railways built them to British standards in
matters of tunneling vs. hill-climbing, by contrast with the flimsy, capital-saving traditions of American railways. And when India was part of a British capital market this
was not obviously foolish.) In any case, to get a British standard of living, said the
Western economists after Independence, the Indians needed British amount of machines, right?
Wrong. Easterly calls machinery fetishism “capital fundamentalism.”463 Believing it, the governments of poor countries and their rich allies embarked on a fifty-year
project of building dams, importing machinery, and in general trying to raise the “capital/output ratio”: more capital, they reasoned, more output, you see, since after all it’s a
ratio, and if you raise capital surely the output will have to follow, because it’s a ratio.
You can detect a certain madness in the project, though we development economists
trained in the 1960s thought it a very handsome theory. It was like thinking that because you begin with a certain weight/height ratio you can raise your height by raising
your weight. Most of the projects failed. “Both Nigeria and Hong Kong,” Easterly reports, “increased their physical capital stock per worker by over 250 percent over the
1960 to 1985 time frame. The results of this massive investment were different: Nigeria’s output per worker rose by 12 percent from 1960 to 1985, while Hong Kong’s rose
by 328 percent.”464 The Akosombo Dam in Ghana created after 1964 the world’s largest
artificial lake, Lake Volta. Instead of the expected boom in aluminum production and
463
464
Easterly 2001, p. 47.
Easterly 2001, p. 67.
242
electricity and irrigation for farming it produced illnesses like river blindness and scant
electricity and no irrigation water at all.465
Turn then to less material causes, looking for some way of supplementing a materialist but unsuccessful theory in economics. Pure thought, perhaps Science, in sense
5b in the Oxford English Dictionary, now ‘the dominant sense in ordinary use’,
lab-coated and concerned with those distant galaxies and E. coli. Science by this modern definition, however, is another Not (Musson and Robinson 1969; Musson 1972). A
powerful myth of we moderns is that Science Did It, making us rich. Scientists believe
it themselves, and have managed to convince the public to fund those inquiries I mentioned into distant galaxies and the genetics of E. coli.
The finding of Not is again relatively recent. Simon Kuznets (1966) and Walt
Rostow (1960) both believed that science had much to do with modern economic
growth, but it is increasingly plain that they were mistaken. The Victorians when in an
optimistic mood tended to combine technology and science together in a vision of Progress. They were mistaken as well. Workshop ingenuity, not academic science, made
better machines. Chemistry made no contribution to the making of steel until the twentieth century, the reactions of a blast furnace being too complex in their details for earlier chemistry to understand fully. Sciences mechanical and otherwise had little or nothing to do with inventions in textiles, which depended instead on a craft tradition of machine makers. The same could be said for the other mechanical inventions of the nineteenth century. Steam might be thought to have had a theoretical base, for it was necessary to know that an atmosphere existed before an atmospheric engine would have
seemed plausible. But it is notorious among historians of physics that the steam engine
impacted thermodynamics, not until very much later the other way around (von
Tunzelmann 1978). Few parts of the economy used much in the way of applied science
in other than an ornamental fashion until well into the twentieth century: electricity and
chemistry were mainly parlor tricks until the late 19th century and did not really come
into their own until the 20th. In short, most of the first couple of centuries of industrial
change was accomplished with no help from academic science.
Literacy, too, is a Not, though more of a Not-But than is science. Literacy was
not essential for modern industry, as is apparent in its fall during periods of intense industrialization (Mitch 1992; West 1978). But a mute, inglorious Watt would lie undiscovered in an illiterate nation, and doubtless did in Russia and Spain. Britain, especially north Britain, with northern Europe (and the United States), was more literate than
other countries in the eighteenth century . Japan, too, with a more difficult form of
writing, had at the time similar attainments in literacy. It appeared ready in the 18th
century for modern economic growth, I have noted, which was only with difficulty
killed off by its government.
Easterly reviews the grim news, if you hope that investment in human capital will
rescue capital fundamentalism. Bad schooling (such as in Pakistan, where education is
handed over to imams or to the relatives of politicians) of course has nugatory effects.
465
Easterly 2001, p. 26f.
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But even good schooling does not do much: only 6 percent of any excess of a country’s
growth rate over the average in the past few decades can be explained by educational
attainment.466
So we have more Nots in the world of the mind. “Cultural factors” more or less
mental are promising and much studied. We have learned from Richard Roehl and Patrick O’Brien a good deal about the French/British comparison, learning for example
that French agriculture was not backward, despite an old British presumption that
Frenchmen simply cannot get anything right. On the technological front it is notable
that Frenchmen invented in the eighteenth century what Englishmen applied. Something was different in England that encouraged more application. Yet looked at from a
distance it seems wrong to separate France from England. It was north-west Europe as
a whole that developed fast, as Sidney Pollard pointed out. Southern France lagged,
but so, after all, did southern England: Macaulay promised in 1830 that backward Sussex could some day hope to equal the West Riding. Belgian industrialization was almost as early and vigorous as Yorkshire’s and Lancashire’s.
*
*
*
*
Suppose then we look at the problem from a chronological distance. “Give me a
lever and a place to stand on,” said boasting Archimedes, “and I shall move the world.”
What is odd about his world of the classical Mediterranean is that for all its genius it did
not apply the lever, or anything much else, to practical uses. Applied technology, argue
Jones (1981) and Mokyr (1990a), was a northern European accomplishment. The “Dark
Ages” contributed more to our physical well being than did the glittering ages of Pericles or Augustus. From classical times we got toy steam engines and erroneous principles of motion. From the ninth and tenth centuries alone we got the horse collar, the
stirrup, and the mould-board plough.
Then from an explosion of ingenuity before 1500 we got in addition the blast furnace, cake of soap, cam, canal lock, carrack ship, cast-iron pot, chimney, coal-fuelled
fire, cog boat, compass, crank, cross-staff, eyeglass, flywheel, glass window, grindstone,
hops in beer, marine chart, nailed horseshoe, overshoot water wheel, printing press,
ribbed ship, shingle, ski, spinning wheel, suction pump, spring watch, treadle loom,
water-driven bellows, weight-driven clock, whisky, wheelbarrow, whippletree (see
“The Wonderful One-Hoss Shay”), and the windmill. Before 1750 the pace merely
slackened, without stopping: note that the pace of invention decelerated on the eve of the
sharpest industrial change. And then came “The Years of Miracles” as Mokyr (1990a)
calls them, from 1750 to 1900.
Why? Can one give an economic account that does not run afoul of the Nots and
the Harbergers?
The economist Israel Kirzner has argued that profit is a reward for what he calls
‘alertness’ (1989). Sheer—or as we say “dumb”— luck is one extreme. Hard work is the
other. Alertness falls in between, being neither luck nor routine work. Pure profit, says
Kirzner, earned by pure entrepreneurs, is justified by alertness metaphors, improving
466
Easterly 20001, pp. 83, 77.
244
both the story and the metaphor. The story of ingenuity can be told in Kirzner’s metaphors. As many economists have emphasized, relying once again on their conviction
that there is No Free Lunch, the systematic search for inventions can be expected in the
end to earn only as much as its cost. The routine inventor is an honest workman, but is
worthy therefore only of his hire, not worthy of supernormal profit. The cost of routine
improvements in the steam engine eats up the profit. It had better, or else the improvement is not routine. Routine invention is not the free lunch experienced since the
eighteenth century. Rationalization of invention has limits, as Joseph Schumpeter and
Max Weber did not grasp. The great research laboratories can produce inventions, but
in equilibrium they must spend in proportion to the value invented—or else more research laboratories will be opened until, in the way of routine investment (see Smith on
Holland above), the cost rises to exhaust the value.
If hard work in invention was not the cause of the factor of fifteen, is the explanation to be found at the other extreme of Kirzner’s spectrum, sheer, dumb luck? No, it
would seem not. After all, industrialization happened in more than one place (in Belgium and New England as well as in Britain, for instance; in cotton as well as in pottery)
but spread selectively (to northern but not soon southern Italy; to Japan and then very
late Korea, but only much later to China—though wait a decade or two, if China stays
on its new bourgeois path). Modern economic growth seems to select countries and
sectors by some characteristic.
Well, then, is it Kirzner’s metaphor of “alertness” that explains the European peculiarity? Perhaps it is. Mokyr makes a distinction between microinventions (such as
the telephone and the light bulb), which responded to the routine forces of research and
development (both the telephone and the light bulb were sought methodically by competing inventors), and macroinventions (such as the printing press and the gravity-driven clock), which did not. He stresses that both play a part in the story. Yet he is
more intrigued by the macro-inventions, which seem less methodical and, one might
say, less economic, less subject to the grim necessities of paying for lunch. Guttenberg
just did it, says Mokyr, and created a galaxy. Macroinventions such as these come to
the alert, not to the lucky or the hard working, and macroinventions seem to lie at the
heart of the modern miracle. In short, as Mokyr says, from the technological point of
view the quickening of industrial change was “a cluster of macroinventions” : the steam
engine, the spinning jenny, and so to a factor of fifteen.
The engineers and physical scientists were commonly more optimistic about thisworldly progress than were the economists. In the words of the chemist and preacher
Joseph Priestley (DATES), "Nature, including both its materials and its laws, will be
more at our command; men will make their situation in this world abundantly more
easy and comfortable, they will prolong their existence in it and grow daily more happy. . .Thus whatever the beginning of the world the end will be glorious and paradisiacal beyond that our imaginations can now conceive."467
467
Quoted in Niebuhr, The Irony of American History (1952), Chap. 3, introduction. This is not
the way the economists at the time were talking, not at all.
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But there is something missing in the metaphor and the story, needed to complete the theory. From an economic point of view, alertness by itself is highly academic,
in both the good and the bad sense. It is both intellectual and ineffectual, the occupation of the spectator, as Addison put it, who is “very well versed in the theory of a husband or a father, and can discern the errors of the economy, business, and diversion of
others better than those engaged in them.”
If his alert observation of error is to be effectual the spectator has to persuade a
banker. Even if he is himself the banker he has to persuade himself, in the councils of
his mind. What is missing, then, from the theory of technological change is power.
(Those outside the mainstream of bourgeois economic thinking will here find something to agree with.) Between the conception and the creation, between the invention
and the innovation, falls the shadow. Power runs between the two. An idea without
financing is just an idea. In order for an invention to become an innovation the inventor
must persuade someone with the financial means or some other ability to put it into effect.
What matters, to put the point another way, are the conditions of persuasion.
Europe’s fragmented polity, perhaps, made for pluralistic audiences, by contrast with
intelligent but stagnant China. The story we all know is of Columbus pitching his expedition to first this monarch and then that one until he got a yes. An inventor persecuted by the Inquisition in Saville could move to Holland. The skilled Jews and Moslems of Spain, expelled in 1492, invigorated the economic life of hundreds of towns on
the Mediterranean, such as far Salonika in northern Greece.
Early in his book Mokyr asserts that there is no necessary connection between
capitalism and technology: “Technological progress predated capitalism and credit by
many centuries, and may well outlive capitalism by at least as long” (1990a). In the era
of the factor of fifteen one doubts it, and even before one might wonder, so close bound
are gain, persuasion, and ingenuity. Capitalism was not, contrary to Marx’s story—
which still dominates the modern mind—a modern invention. As the medieval historian Herlihy put it long ago, “research has all but wiped from the ledgers the supposed
gulf, once thought fundamental, between a medieval manorial economy and the capitalism of the modern period.” And any idea requires capitalism and credit in order to
become an innovation. The Yorkshireman who invested in a windmill c. 1185 was putting his money where his mouth was, or else putting someone else’s money. In either
case he had to persuade.
What makes alertness work, and gets it power, is persuasion. At the root of
technological progress, one might argue, is a rhetorical environment that makes it possible for inventors to be heard. If such a hypothesis were true—its truth is untried, and
may at last end up itself on the pile of weary Nots—it would also be pleasing, for it
would suggest that free speech and an openness to persuasion leads to riches. Europeans tortured, beheaded, and burnt people they disagreed with in alarming numbers, to
be sure, but it may be argued that their fragmented polity let new thinkers escape more
often than in China or the Islamic world at about the same time. And when the Euro-
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peans, or at any rate some of them, stopped torturing, beheading, and burning each
other, the economy grew. No wonder that the nations where speech was free by contemporary standards were the first to grow rich: Holland, Scotland, England, Belgium,
and the United States.
The conclusion, then, is that Harberger Triangles—which is to say the gains from
efficiency at the margin, as economists put it—cannot explain the factor of fifteen. This
is lamentable, because economics is much more confident about static arguments than
about dynamic arguments. And yet the conclusion is not that static arguments have no
role. On the contrary, they give us the means to measure what needs to be explained on
other grounds. A static model of costs and revenues, for example, allows one to measure productivity change with the abundant material on prices. One can find out with
static models how widespread was the ingenuity set to work in the eighteenth and nineteenth centuries. A static model of international trade allows one to see the wider context for the British economy, to see that political boundaries do not cut economies at
their joints.
*
*
*
*
But going beyond the usual models, static or dynamic, appears to be necessary.
Watch two economists in the 20th century groping towards a new model.
Someone who invested in doctrines when world capitalism seemed to be working just fine—on the eve of the World War I, say—had a good chance of keeping for life
an optimistic opinion of markets and entrepreneurs. So it was with one of the bestknown economists of the last century, Joseph Alois Schumpeter (1883–1950) of Vienna,
Bonn, and Harvard. But someone who invested in his human capital when things were
dismal and chaotic—early in the Great Depression, say—was likely to take a less cheerful view. So it was with another of the century’s best-known economists, Schumpeter’s
younger colleague John Kenneth Galbraith (1908–2006) of Ontario, Berkeley, Fortune
magazine, and then, at the very end of Schumpeter's two decades there, Harvard.
Both tried political power early, Schumpeter as a pro-market minister of finance
in Austria's brief socialist government after World War I and Galbraith as a New Dealish deputy director of the U.S. Office of Price Administration during World War II.
Experience in government had opposite effects on the two. Schumpeter became permanently suspicious of state power. Galbraith became permanently delighted with it.
These two men of clever words, both master rhetoricians, laid out the case for
and against unregulated markets. Half a century on you can review their efforts in a
new biography of Schumpeter and a new reissue of Galbraith's most famous book.
Schumpeter’s pro-capitalist and conservative case looks better. Galbraith’s anti-market
and regulatory case looks worse.
As Thomas McCraw, a professor of business history at Harvard Business School,
explains in Prophet of Innovation, his charming new biography of the man in full, Joseph
Schumpeter from first to last defended the entrepreneur with his own talk, talk, talk. A
free economy, Schumpeter claimed from his earliest important book, The Theory of Economic Development (1911), runs on innovation, not routine. "Schumpeter turned Karl
247
Marx on his head,” McCraw writes. “Hateful gangs of parasitic capitalists become, in
Schumpeter's hands, innovative and beneficent entrepreneurs.”
Schumpeter’s best-known book is his hastily written but glittering Capitalism, Socialism, and Democracy, which received scant notice when it first appeared in 1942. It
contained his usual praise for the businessperson, but it also predicted that capitalism
would not survive, and that democracy might not either. The book "admits, and rather
cheerfully, that the patient is dying,” the economist Paul Samuelson wrote in a 1970
Newsweek column, “but of a psychosomatic ailment. No cancer, but neurosis is [the capitalist's] complaint. Filled with self-hate, he has lost his will to live."
Most intellectuals in the 1930s and early ’40s had the same neurosis, and the
same pessimism. Schumpeter believed that capitalism was raising up its own grave
diggers—not in the proletariat, as Marx had expected, but in the sons and daughters of
the bourgeoisie itself. Lenin’s father, after all, was a high-ranking education official,
Lenin himself a lawyer (as by the way were both Luther and Calvin). It wasn’t the children of autoworkers who pulled up the paving stones on the Left Bank in 1968. Today
the most radical anti-globalists are socialist children of capitalist parents.
Schumpeter’s cultural pessimism about capitalism has proven wrong. The capitalist idea has flourished worldwide. The American economy has continued to show
startling entrepreneurial vigor, though both Schumpeter and Galbraith thought that
committees would kill it.
By 1967, when Galbraith published The New Industrial State, his most considered
book (he revised it three times down to 1985), he was already famous among general
readers for The Affluent Society (1958). In that book he pointed out that we Americans
have grown affluent in private goods, loaded down with refrigerators and finned automobiles. Splendid. But, Galbraith claimed (in the midst of the largest investment in
education in the nation’s history), we have neglected the public goods of education and
public parks and decent provision for the poor. In Sweden, he averred, they run things
better.
Ten years later The New Industrial State offered additional Sweden boosting. It
has now been reissued with an introduction by the author's son James, also a notable
economist on the Democratic left. The elder Galbraith argued that the great scale of
modern industry has created a “technocracy,” which runs the world with committees.
Anyone who has worked in a large corporation or a large university knows the feeling.
Galbraith argued that advertising manipulates demand in order to fit with technical necessities. Anyone who has lusted for an iPhone knows that feeling too. A new model of
your father’s Oldsmobile was so very expensive to plan and took so very long to bring
to market—ask Airbus today about all this—that the demand had to be guaranteed
with elaborate provision years in advance for advertising and distribution.
So let us adopt democratic socialism, said Galbraith. Let us concede that the new
industrial state is one of massive corporations facing massive unions, under the benevolent and skillful regulation of massive governments. “The small competitive firm cannot afford the outlays that [modern, big-time] innovation demands,” he wrote. If modernity needs big corporate bureaucracies to do such big stuff, surely we need big gov-
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ernments to coordinate everything. The so-called free price system won’t do. “If the
market is uncontrolled,” Galbraith wrote, “it will not know” when the new car will roll
off the line or when a new drug will pass FDA approval.
McCraw's book on Schumpeter has an important anti-Galbraithian economic
theme. McGraw argues that Schumpeter's search for "exact economics"—the ruling
passion of modern economics, though not a passion that Galbraith indulged—was inconsistent with Schumpeter’s profound discovery about the marketplace, namely, that
it depends on invention, innovation, and entrepreneurship, all things counter, original,
spare, strange. In Schumpeter’s famous phrase from Capitalism, Socialism, and Democracy, borrowed from the German economist and sociologist Werner Sombart, capitalism
depends on "perennial gales of creative destruction."
"I am not in the habit of crowning our bourgeoisie with laurel wreaths," wrote
Schumpeter in his 1918 essay "The Crisis of the Tax State.” Notice the sneeringly aristocratic imagery, conventional by then in European rhetoric and prominent in all of Galbraith’s writings. As Schumpeter remarked a quarter of a century later, "The public
mind has by now so thoroughly grown out of humor with [capitalism and the bourgeois life] as to make condemnation of capitalism and all its works almost a requirement of the etiquette of discussion."
But Schumpeter was bowing in 1918 to anti-bourgeois etiquette in order to set up
the opposite point, that in fact the bourgeoisie "can do exactly what is needed now" and
should be given its head. The irony, McCraw points out, is characteristic of the man,
and of his theory of political economy: capitalism was wholly successful economically
but doomed sociologically.
Galbraith, like many other economists of his generation, worried about private
monopoly, though embracing public monopolies. Schumpeter never had such worries.
Creative destruction, he argued, would take care of the trusts and pools and over-big
corporations. In truth the list of companies that Galbraith held in awe as great forces in
1967 looks quaint now. U.S. Steel, AT&T, and General Motors belie his assertion “of
great stability in [a great corporation’s] position in the planning system.” Eight years
after the first publication of The New Industrial State, Bill Gates founded Microsoft. Let
creative destruction rip.
McCraw himself italicizes a very unripping assertion of his own that "the two
pillars that support all successful business systems [are] a modern concept of private
property and a framework for the rule of law.” That’s nothing like Schumpeter’s idea.
Laws are necessary, of course, but so are road mending and brick making. Private
property and a framework for the rule of law have existed in written form since ancient
Mesopotamia, and in every substantial civilization from third-century B.C. China to
12th-century A.D. Timbuktu. Roman law, with its detailed concept of private property,
was worshipped in Europe for two millennia. Yet those civilizations, Schumpeter emphasized, never reached the standard of economic production and progress the modern
West has. Not even close.
What was missing was the thing Schumpeter emphasized and Galbraith attacked, a thing unique about Europe since the Netherlands in 1600 and England in 1715:
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a business-dominated civilization. "Capitalism does not merely mean that the housewife may influence production by her choice between peas and beans," Schumpeter
wrote in his swan song, a 1950 essay grimly entitled "The March Into Socialism.” Capitalism also "means a scheme of values, an attitude toward life, a civilization—the civilization of inequality and of the family fortune.” The last touch, incidentally, is pure
Schumpeter: "The civilization of inequality" makes the socialists' case by adopting their
words, yet Schumpeter politely disagrees on how we should judge the outcome.
The American "scheme of values" in the 19th century, Schumpeter said, "drew
nearly all the brains into business"—witness, say, Mark Twain's failed entrepreneurial
projects—"and impressed the businessman's attitudes upon the soul of the nation.”
Schumpeter remembered wistfully the pre-1914 civilization of Europe itself as following
"the beliefs and attitudes of the business class," "essentially rationalist and utilitarian. It
was not favorable to cults of national glory, victory, and so on" (though favorable
enough, Professor Schumpeter, to start and sustain the Great European Civil War of
1914–1989).
"Capitalism stands its trial before judges who have the death sentence in their
pockets,” wrote Schumpeter. “The only success a victorious defense can possibly produce is a change in the indictment.” Thus the major indictment of capitalism by the socialists of the 1850s' was for immiserizing the working people. When this proved scientifically wrong, the socialists of the 1890s indicted it for imperialism. When that too
proved wrong, at any rate by the lights of the best economic scientists who troubled to
look into the matter (among them Joseph Schumpeter), the socialists of the 1950s indicted it for alienation. When this accusation seemed less fresh, the socialists of the 1990s
indicted it for environmental decay. Schumpeter wrote that "such refutation," rationally
proving the latest indictment wrong, "may tear the rational garb of attack [on capitalism
and all its work] but can never reach the extra-rational driving power that always lurks
behind it."
Schumpeter stressed the robustness of capitalism in the economy, the vigor with
which new entrants dissolve the monopoly profits of the first mover, and the enormous
dividend it leaves for the poor. Robust, yes, but in a certain important respect still fragile: "The emotional attachment to the social order," wrote this conservative in an almost
Burkean way, was "the very thing capitalism is constitutionally unable to produce.” No
one loves a Rockefeller. Everyone loves a Virgin Queen.
But there’s still something missing. What both Schumpeter and Galbraith got
right, and most modern economists have gotten wrong, is what the sociologists call capitalism’s “embeddedness” in a society. The economy is nothing without the words
supporting it, whether conventional wisdom or creative entrepreneurial projects.
Schumpeter was mistaken about the future of self-doubt among the bourgeoisie. The
bourgeoisie claimed back its self-confidence after Reagan and Thatcher, and more to the
point after Hayek and Friedman—though there’s still work to be done in praising bourgeois virtues. Galbraith was mistaken in expecting the reduction of entrepreneurship to
committees and the permanence of companies like General Motors. Entrepreneurship,
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even within a great organization, still matters. And as for the arrogant corporations,
“nor is favor to men of skill; but time and chance happeneth to them all.”
What’s finally missing in both Schumpeter and Galbraith’s grim prognoses is a
theory of language. Human beings swim in words. We’re just realizing this, after a
long, long enchantment with Marxist or Freudian or behaviorist claims that secret or
not-so-secret material interests rule everything, that the makers of the U.S. Constitution
were driven by their property values, or that slavery was abolished to strengthen manufacturing. One quarter of national income is earned from sweet talk, that is, the persuasion that a manager or teacher or salesperson or foreman exercises on the job.
“About the end of the seventeenth century," Schumpeter wrote in his great 1939
tome Business Cycles, the English political world "dropped all systematic hostility to invention. So did public opinion and the scribes.” That’s exactly right. And it’s what is
wrong with the materialist conviction since Marx that ideas are froth on deeper currents. Ideas, words, rhetoric, “reason”: the world is governed, another economist said,
by little else.
McCraw argues that Schumpeter encouraged what business schools now call
"strategy," "an attempt by firms to keep on their feet,” as Schumpeter put it, “on ground
that is slipping away under them.” It’s practical business stuff. And of what is the “attempt” constituted? Plans, words, sweet talk. An economics that doesn’t acknowledge
talk and its creativity may be in some pointless sense “exact.” But it doesn’t illuminate
the world we have, the world admired by Schumpeter and zinged by Galbraith, of entrepreneurs—in the market, the corporation, the government, the laboratory, the street.
Capitalism, like democracy, is talk, talk, talk all the way down.
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I’m not sure how this fits here. It does, but where.
Chapter 27:
Ideology is Rhetoric
Talk, talk, talk, or something more sinister: “ideology”? We seem to be studying,
to employ the usual word, "ideology," the change from a supposedly anti-bourgeois
ideology in England around 1600 to a supposedly pro-bourgeois ideology around 1776.
Presumably "ideology" can be used for a scientific study, because presumably a society
always has some ideologies knocking about, and the balance of one or the other can be
the subject of an historical inquiry. A good idea, if academic, would seem to be to get
the word under control. But it keeps leaping up and growling and changing its spots.
There is a reason for this: it is the wrong word.
The very word "ideology" itself is strangely recent. Maybe the recentness is not
so strange, come to think if it, considering that in the Christian West a view of society as
something other than God's own creation through God's own anointed kings becomes
widely disseminated only in the 18th century. Before that it had been a millennium or
longer since people in the West had needed a word to speak about government skeptically from the outside.
"Ideology" was first used roughly in its hostile modern sense by, of all people,
Napoleon, who attacked the academics and other airy-fairy—and freedom-favoring—
theoreticians opposing his bold schemes as mere "ideologists," by which he meant ivory-tower thinkers. And then some decades later the Marxists gave it its modern sense
of "prejudices in aid of power." "Marx was the economist who discovered ideology for
us and who understood its nature," wrote the economist Joseph Schumpeter in 1949 (p.
281).
The word idéologie was first current in the 1790s to describe a science of ideas as
derived from the senses alone, especially the system of the Abbé de Condillac. Until
late in the 19th century the word was used by non-Marxist people in a wider but related
sense to label the study of systems of ideas. In 1881, according to the Oxford English Dictionary, the Proceedings of the Philological Society declared that "valuable evidence could
be derived from comparative ideology, a branch of the science of language . . . hitherto
much neglected." What the Proceedings seem to mean is that linguistics was at the time
focused on its amazing discoveries of the laws of sound change and was not yet concerned with the figures of thought that language conveyed (a language "conveying" a
thought is an example of such a figure, known in the Department of Communication as
the misleading "conduit metaphor"). To put it in linguistic jargon, the science of language was obsessed with phonology and etymology, and was later to become obsessed
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with syntax. Busy with such matters, the linguists for a long time left aside such a
crude subject as semantics—the study of meaning in language.
The original of the complete Oxford English Dictionary of 1928 does not so much
as mention the Marxist and modern meaning of the word, nor does the Supplement five
years later. The fact itself traces the ideology of bourgeois Britain from October 1899,
when the section of the Dictionary containing "ideology" was first published, to 1933.
Today at last the Dictionary, under continuous revision on the computer, gives a fourth
and as it were ideological sense 4: "A systematic scheme of ideas, usually relating to
politics or society, or to the conduct of a class or group, and regarded as justifying actions, especially [a scheme of ideas] that is held implicitly or adopted as a whole and
maintained regardless of the course of events," with the first English instance in 1909.
But in English the Marxist version of the word really got going in the 1930s, with
the translation in 1936 by Louis Wirth and Edward Shils of Karl Mannheim's Ideologie
und Utopie (1929). The crumbling political health of liberal capitalism during the 1930s
didn’t hurt in making the new word fashionable. Analysts of the notion seem to agree
that an ideology gets expressed more sharply in an era of political tension. Few times in
modern history have been more tense than that low, dishonest decade.
Ideology "gets expressed" because people need words and other figures of
thought just when the politics is most in dispute, the better to push politics this way or
that. They need for example a system of thought about fasci, Italian "bunches," to justify
the ending of Italian liberalism in 1922. Or they need a racial rhetoric, complete with a
vocabulary of Jews as "vermin" (Ungeziefer) and non-Jewish Germans as Volk, to justify
the ending of German liberalism in 1933. Or, to take a recent example, they need a metaphor of a "war on terror" and a corresponding ideology of neo-conservative imperialism to assault American liberalism.
Ideology moves dialectally. You do not need to be a Hegelian to think so. Obviously, in 4th century Athens an aristocratic ideology of guardians and philosopher-kings
was a reaction to the alleged excesses of a democratic ideology. The same aristocratic
ideologue, Plato, invented, too, an intellectual ideology that he and we call "philosophy," in dialectical opposition to the democratic ideologies of the sophists and rhetoricians. And the science of rhetoric itself had risen a century before Plato, again dialectically, out of the fall of tyrants in Sicily.
Equally obviously, the ideologies of Baptism, Calvinism, Puritanism, Quakerism,
and the endless other Protestant splittings—rubber tire Amish vs. steel-tire Amish—
reacted dialectally to Papist plots, and especially to each other. An ideology of fundamentalism reacts to the ideology, and to the concrete politics on the ground, of Western
orientalism, imperialism, feminism, republicanism, liberalism, and especially oil-ism.
Of course the dialectic is not independent of people and circumstances, and so
ideologies are not autonomous systems of ideas dropping from the heavens, as claimed
for their own ideologies by Hegel or St. Augustine. Without Greek systems of law
courts, there would have been no call for a science of rhetoric in 5th-century Sicily.
Without Plato, there would have been no specifically anti-rhetorical "philosophy."
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Without George Fox, no Society of Friends. Without Russian backwardness, no Russian
nihilism. Without Osama bin Laden, no Al Qaida.
When politics is not much in dispute, as in France before 1789—at any rate by
comparison with France after 1789—one does not need such a word as ideology. "The
function of ideology," wrote the late Clifford Geertz in 1964, "is to make an autonomous
politics possible by providing the authoritative concepts that render it meaningful, the
suasive images by means of which it can be sensibly grasped" (Geertz 1964 [1973], p.
218).
I would only quarrel with leaving it as Geertz wanted to do at the conscious level. That is, Geertz wanted to leave "unreflective" or "received" tradition aside. I don't
think that's wise. The "traditional politics of piety and proverb" (p. 221) is best seen as
an ideology, too. Unreflective Weltanschauung is "ideology," since otherwise ideology is
something only for the clerisy and the more thoughtful politicians, a system of reflective
belief. Geertz would have disagreed, arguing that a political thought becomes an ideology only when it is explicit and not taken-for-granted. Though he did not say why he
did, he wanted ideology to be a matter of "strain, taking an intellectualist form, the [explicit, non-tacit, reflective] search for a new symbolic framework in terms of which to
formulate . . . political problems" (p. 221).
Mannheim had in 1929 defined two sorts of ideologies, one "particular" and the
other "total." The particular ideologies are "more or less conscious disguises of the real
nature of a situation, the true recognition of which would not be in accord with [ones]
interests. . . . [ranging] from calculated attempts to dupe others to self-deception"
(Mannheim 1929 [1936, 1954], p. 49). It "never departs from the psychological level" (p.
51), the traditional politics of piety and proverb. In the 1970s Alderman Thomas Keane,
who later went to jail, but not for perpetrating an ideology, defended an employment
tax in Chicago from the perfectly rational charge that it would reduce wages in Chicago
by asserting that “Chicago will never tax the working man.” The tax was imposed in
legal form on the employers, you see.
The total ideologies are "the characteristics and composition of the total structure
of the mind of this epoch or of this group" (pp. 49-50). Both particular and total ideologies, however, are viewed by Mannheim as objectionable, compared with a realm of
Science free from ideology. That is, ideology is still in Mannheim a cuss word, a sneer
by practical people at mere theorists, as it was with Napoleon. I have political ideas.
You, by contrast, have mere ideologies.
Mannheim would have complained that to use "ideology" before the great ideological factories of the 19th century in Europe is anachronistic. He argues that no conception of a "total" ideology, as he calls it, existed before then. True, he also argues that
the notion of false consciousness is ancient—for example (p. 62), is the man presenting
himself as Hebrew prophet a true or false one? His case for a wholly modern sensibility
of "ideology" is that "in the place of the medieval-Christian objective and ontological
unity of the world [which would itself seem to be an 'ideology'?], there emerged the
subjective unity of the absolute subject of the Enlightenment—'consciousness in itself'"
(p. 58), which seems right, but irrelevant. The pulling out of the Godly rug is of course
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central to the shift of ideology from religion to politics. Yet religion, or the Roman system of patriotism, or the philosophy of Socrates and his students, can be an ideology,
words in the aid of power. Mannheim regards the sequence from God to consciousness-in-itself to historical world spirit to ideology as Kant-Hegel-Marx in the realm of
ideas, but "discovered not so much by philosophy as by the penetration of political insight into . . . everyday life" (p. 59). He emphasizes the French Revolution as such a
penetrating time, which again seems right, and also irrelevant to whether ideology is
merely modern. In a somewhat broader sense of the word, none of his arguments
seems to refute a hypothesis that earlier people, too, had ideologies.
As Geertz notes, "in Sutton, Harris, Kaysen, and Tobin's in many ways excellent
The American Business Creed. . . an assurance that 'one has no more cause to feel dismayed or aggrieved by having his own views described as "ideology" than had Molière's famous character by the discovery that all his life he had been talking prose,' is
followed immediately by the listing of the main characteristics of ideology as bias, oversimplification, emotive language, and adaption to public prejudice" (Geertz 1964 [1973],
p. nn). Ideology is peculiarly subject to what the rhetoricians call the "circumstantial ad
hominem," that is, an attack on the grounds that you have an idea because of your circumstances, and that it is shameful to be so influenced, which shame tends to undermine the very idea you have. It is no accident, comrade, that you express the bourgeois
line---after all, you are objectively bourgeois. It's pure Marxian and modern cynicism:
ideology is merely rationalized prudence.
The analysis of ideology is therefore a piece with the Shame of Rhetoric, so prominent in Western thought since the 17th century. Bacon, Hobbes, Descartes, and Spinoza
among other hard men of the early scientific revolution declared eloquently against eloquence. Since the 17th century in Europe to be caught arguing a case has been thought
somehow shameful. The realm of Science is supposed to be a rhetoric-free zone. For
example, D. D. Raphael (one of the chief editors of the great Glasgow edition of the
works of Adam Smith, from whom he could have learned the importance of rhetoric)
declared that "ideology. . . is usually taken to mean, a prescriptive doctrine that is not
supported by rational argument" (cite).
Geertz points out that embarrassment with ideology resembles embarrassment
with religion. He and I would argue that religion and political ideology are similar
things, and not to be set aside from the real or the philosophical analysis on that account. The "militant atheist" attacks religion the same way even sophisticated social
critics like Raymond Aron and Edward Shils attacked communism, as "mere" ideology
(Geertz 1964 [1973], p. 199). The philosopher of religion I mentioned earlier, Alvin
Plantinga, has argued that the position of militant atheists is based on a similarly circular argument (Plantinga 2000, pp. xiii, 169). When Ludwig Feuerbach, Marx, Thomas
Hardy, Nietzsche, Freud, Richard Dawkins, and other confident analysts of theism declared that belief in God comes from the need for comfort in a world that is actually
mere matter or Hap or father-love or evolution, they are assuming their conclusion: that
after all belief in God is silly because it of course is not true. This makes it easy to conclude
triumphantly, after much scorn, that belief in God is not. . . true. "God," wrote Feuer-
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bach in Das Wesen des Christentums in 1841, "is nothing else than man: he is, so to speak,
the outward projection of man's inward nature."
Embarrassment with both religion and ideology, in other words, are part of that
larger and modern embarrassment with human argument in all its crazy richness, that
is, with "mere" rhetoric. Mannheim explicitly takes Bacon's analysis of the four idols as
a "forerunner of the modern concept of ideology" (p. 55), with of course Machiavelli,
and Hume's History with its focus on interest and on the "feigning" involved in politics
(p. 56). All these, including Mannheim, are anti-rhetorical thinkers. Attributions of
(mere) ideology are ways of damning (mere) rhetoric. Purging our thinking of such
idols of the tribe or idols of the marketplace, said the anti-rhetorical rhetoricians of the
17th century, with echoes in moderns like Mannheim, will lead to Reality.
Well, no, it won't.
In attempting to leap to a Scientific realm entirely free of rhetoric---a form of
words that does not use the forms of words---Mannheim subjected himself to what
Geertz calls the Mannheim Paradox, that you are being ideological if you oppose an
ideology. As Mannheim himself put it, "it is no longer possible for one point of view
and interpretation to assail all others as ideological without itself being placed in the
position of having to meet that challenge. . . . Nothing was to prevent the opponents of
Marxism from availing themselves of the weapon and applying it to Marxism itself"
(Mannheim, pp. 66, 67). "Strange to relate," said Schumpeter, to mention of the opponents who did avail himself, Marx ”was entirely blind to its dangers so far as he himself
was concerned, . . a bourgeois radical who had broken away from bourgeois radicalism." All the Parisian intellectuals of the 1840s, Schumpeter said, viewed society as a
struggle of haves against have-nots. Consult Balzac.
Geertz distinguishes two theories of ideology, the interest theory—thus one
might say that "an ideology of the bourgeois virtues emerges from the interests of the
bourgeoisie"—and the other the strain theory—thus one might on the contrary say that
"an ideology of the bourgeois virtues emerge to make people under strain feel good."
"In the interest theory, ideological pronouncements are seen against the background of
a universal struggle for advantage; in the strain theory, against the background of a
chronic effort to correct socio-psychological disequilibrium. In the one, men pursue
power; in the other, they flee anxiety" (Geertz 1964 [1973], p. 201).
Interest theory, he says, is all right so far as it goes, but "lacking a developed
analysis of motivation, it has been constantly forced to oscillate between a narrow and
superficial utilitarianism that sees men as impelled by rational calculation of their consciously recognized personal advantage and a broader, but no less superficial, historicism that speaks with a studied vagueness of men's ideas as somehow 'reflecting,' 'expressing,' 'corresponding to,' 'emerging from,"' or 'conditioned by' their social commitments" [Geertz 1964 [1973], p. 202]. What he is complaining about is the absence of any
but a simpleton's theory of language, language "expressing" a base of material interests.
"Ideology is a patterned reaction to the patterned strains of a social role" (Sutton
et al., quoted in Geertz 1964 [1973], p. 204). A monarch must be awe-inspiring yet have
the common touch, as the fictional Prince Hal said he needed to in order to become
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Henry V, or as the actual Elizabeth learned and practiced, becoming both terrible and
beloved: “I know I have the body but of a weak and feeble woman; but I have the heart
and stomach of a king, and of a king of England too.” The “strain” in Geertz’ terms is
that she must be both “king” and a beloved virgin. The patterned reaction was a theory
of the great chain of being.
Or, at the other end of our story, Jane Austen's heroines must have both sense
and sensibility. The strain was relieved in the English gentry c. 1810 by a theory of the
self-fashioning ethical person, an essential bourgeois construction, free of the fauxaristocratic absurdities of Mr. ,,,,, claim to Position: ***QUOTE. You are who you make
yourself, said bourgeois Jane, not who you were born as, at any rate within the narrow
limits of the middling middle class.
Geertz analyzes the strain theory into four sub-theories, of ideology as pressurerelieving, morale-building, solidarity-creating, and politics-pushing. But he notes that
such a functional analysis will often crash on unintended consequences, called in
learned jargon "latent" function—mainly called so to conceal the sound of the crash. "A
group of primitives sets out, in all honesty, to pray for rain and ends by strengthening
its social solidarity; a ward politician sets out to get or remain near the trough and ends
by mediating between unassimilated immigrant groups and an impersonal governmental bureaucracy" (Geertz 1964 [1973], p. 206; the theory of ward bosses he articulates
here, by the way, is mistaken). "Commonality of ideological perception may link men
together, but it may also provide them, as the history of Marxian sectarianism demonstrates, with a vocabulary by means of which to explore more exquisitely the differences
among them" [p. 206]. In other words, so far as the connection between a particular
"strain" and its outcome is concerned, you pays your money and you takes your choice.
The problem is that "Both interest theory and strain theory go directly from
source analysis to consequence analysis without ever seriously examining ideologies as
systems of interacting symbols, as patterns of interworking meanings" (p. 207). That is,
the students of ideology ignore the humanities (cf. Geertz, p. 208). To be more particular—Geertz himself confines the word to footnotes by-the-by, pp. 209n22; 213n30—they
ignore rhetoric.
My point is that we do better to leave aside the narrowing word “ideology,”
which forces us every time to attribute any verbal device to material interests. We had
better use the good old word “rhetoric,” which includes the political but does not force
us to regard every piece of language as a cover for a political purpose. "Ideologies are
ideas whose purpose is not epistemic, but political," declares the on-line Stanford Encyclopedia of Philosophy (2001). The remark encapsulates the philosophical attitude towards rhetoric. "Epistemic" ideas are honest, rational, etc. "Ideology"—or, worse,
"rhetoric"—is dishonest, emotional, etc. An ideology can exhibit "false consciousness"
(falsches Bewusstsein). A philosophical history—historical materialism, for example—
cannot.
Geertz gives as an example the attempt by American labor unions to attack the
Taft-Hartley Act of 19**… as a "slave-labor law." A more up-to-date example is the brilliant rhetorical move of Republicans recently to label the inheritance tax—thought by
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many economists to be a pretty good tax, by contrast at any rate with the income tax—
the "death tax." Not only do I die, but they tax me for it. If you don't understand the
figurative nature of language you think that people are mechanically fooled by such a
metaphor. You miss that they might be playing with it, or find it illuminating, or be
making a joke, or staking out argumentative ground, forcing the opponents to explain
awkwardly why a tax at death is not a tax "on" death. And further, language can't be
mechanical in its effects, because it is such an inexpensive machine. If "death tax" is effective as rhetoric mechanically, then why is not a locution such as "a tax on the unjustly
inherited wealth of spoiled rich kids" equally effective? And if so, why would not some
inexpensive counter-move? And a counter-counter-move?
As Geertz points out, the very meaning of the mobile army of metaphors we call
"an ideology" depends on the context, material and ideational. It’s not always about interest, or power. Sometimes it is about language itself, or other human concerns. The
metaphor of a "great chain of being" is drained of its meaning when the God term at the
top is toppled. It's no longer an effective metaphor. Geertz quotes Kenneth Burke, who
believed that Japanese smile rather than look as we do sad when a friend's death is
mentioned, presumably from the pleasant thoughts the mention evokes. Without that
social context, particular to Japan, a Westerner regards the smile as macabre.
“Ideology” is still another example of many of “rhetoric” in modern, scientistic
drag. Consider again the very founding of the word. Antoine Louis Claude Destutt,
comte de Tracy writes in 1801 in Les éléments de l'idéologie of a new science of ideas: "The
science may be called ideology, if one considers only the subject-matter; general grammar, if one considers only the methods; and logic, if one considers only the purpose.
Whatever the name, it necessarily contains these three subdivisions" (quoted in Mannheim p. 63n). The substitution of "ideology" for "rhetoric" here is straightforward:
Destutt de Tracy is merely rewriting the trivium of grammar, rhetoric, and logic, the neologism ideologie taking the place of the ancient but recently dishonored rhetorique.
That’s my point.
"But though science and ideology are different enterprises,” Geertz wrote in anticipation of the rhetorical study of science since the 1970s, “they are not unrelated ones.
Ideologies do make empirical claims about the condition and direction of society, which
it is the business of science (and, where scientific knowledge is lacking, common sense)
to assess. The social function of science vis-à-vis ideologies is first to understand them
—what they are, how they work, what gives rise to them—and second to criticize them,
to force them to come to terms with (but not necessarily to surrender to) reality" (Geertz
1964 [1973], p. 232). But the same could be said of rhetoric.
So we are not studying "ideology." We do not want always, as popular as the
move is in departments of English these days, to find the secrets of power concealed
under language. Prudence-only is not the only issue in life. We should instead use the
much older word, and take full advantage of the humanistic side of our civilization.
That is, we should study the rhetoric of capitalism and anti-capitalism. "Ideas" come in
rhetorical form, and can no other.
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I do not want to spend much time here defending the word and subject “rhetoric,” since I and many others have done so at length since its revival by Kenneth Burke
and ** Chicago guy and Chaim Perelman, not to speak of its 2500-year old history as the
basis of education in the West (my own defenses of the subject, for example, are contained in McCloskey 1985 [1998], McCloskey 1990, and McCloskey 1994, which give full
references to the literature). If you find the word odd you need to get out more. It does
not mean “fancy talk in aid of lying,” as in “Senate Campaign Mired in Rhetoric.”
That’s the newspaper sense, and we need to get beyond letting headline writers determine how we think. In sophisticated usage the word means, as Aristotle put it, the
study of the available means of (unforced) persuasion. It covers all of human persuasion, from mathematical theorems to arguments from analogy. In fact, mathematical
theorems often depend on arguments from analogy (McCloskey 1985 [1998], pp. 68-69).
As the classicist Werner Jaeger put it in 1933, rhetoric was “the first humanism
which the world had seen” (Jaeger 1933 [1939, 1945], Vol. 1, p. 302). It was the first attempt to look back on language instead of taking words and logic as transparent names
for things. It was the first second-order thinking. Rhetoric and its numerous descendants such as philosophy and theology and biblical criticism and linguistics and legal
reasoning, and with its analogies in other cultures, such as Panini’s grammar of Sanskrit, composed about the same time as the early rhetoricians in Greece first spoke out,
is what we mean by intellectuality. It has accumulated an impressive machinery of
analysis, the study of ethos and pathos (called nowadays social psychology), the naming of figures of reasoning (called logic and statistics), the awareness of how words do
their work (called literary criticism and communication theory). By contrast, “ideology” uses a greatly simplified theory of rhetoric, claiming that figures of speech such as
the Great Chain of Being or the working man “free” to offer his labor need to be
“stripped away” as misleading “ornament” to reveal the truth. Ideology as understood
nowadays embodies the conduit theory of communication, and only the conduit theory.
If we are going to get beyond thinking of political ideas as lumps transmitted unaltered
from one mind to another through conduits of communication we need to become
again rhetoricians. We need to get over the anti-rhetorical rhetoric of the 17th century.
"Rhetoric" has another virtue as a name for what we are studying here. It names
the belief that ways are many. The Chinese philosopher Mencius put it so: "Why I dislike holding to one point is that it damages the tao. It takes up one point and disregards
a hundred others" (quoted in Richards 1932, p. 344: **find in Mencius). Jack Goody
and Ian Watt find in such remarks a remnant of oral, pre-literate culture (Goody and
Watt, 1962-63, p. 344). Its son "philosophy" by contrast, and its disreputable little greatgreat grandson "ideology," names the belief that the way is one.
Plato brought philosophy to maturity, as Hobbes brought political philosophy to
maturity, after discovering mathematics as an adult. Aubrey tells (as usual we do not
know his source) the famous story of how Hobbes decided that geometry was the one
way:
He was forty years old before he looked on geometry; which happened accidentally. Being in a gentleman's library Euclid's Elements lay open, and 'twas the
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forty-seventh proposition in the first book. He read the proposition. “By God,”
said he, “this is impossible!” So he reads the demonstration of it, which referred
him back to such a proof; which referred him back to another, which he also
read. . . . At last he was demonstratively convinced of that truth. This made him
in love with geometry.
Aubrey, Lives **exact cite
Plato some two millennia before appears to have had a similar experience, since his dialogues suddenly, it seems (we are not entirely sure of their sequence), start giving Greek
mathematics as an example of perfected thought. But the history of mathematics itself
has undermined such monism. The way, the tao, the available means of persuasion are
not one. Geometry was discovered with a jolt in the 19th century to be multiple, depending on use. Logic itself was discovered in the 20th century, with a larger jolt, to be
multiple, depending on use.
And so I have been speaking of the triumph of a “rhetoric” of capitalism, arising
in the city states of medieval Italy, perfected in Holland in the Golden Age, applied to
everything from taste in clothing to the biology of worms in 18th- and 19th-century Britain, and triumphant in America and now worldwide. The word allows for many other
ways, some of them hostile to capitalism, which is precisely capitalism’s virtue and capitalism’s problem.
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Chapter 28:
Sweet Talk is How We Work
And the other direction of causation is equally important: that commerce
sweetened people. Cooperation, not alienation, is the usual result of
commerce. It results in increasing, not diminishing, social contact.
Speech dominates bourgeois society. Show the historical/sociological
evidence of this. Coffee house, long-distance deals. Contrast with
geniza, e.g.
It makes a difference whether people don’t speak or speak.
Paul Goodman (1971 [1972], p. 3).
About Brindley the canal digger: “As plain a looking man as one of the
boors of the Peake, or one of his own carters; but when he speaks, all ears
listen, and every mind is filled with wonder, at the things he pronounces
to be practicable”
T. Bentley The History of Inland Navigations, 1769, p. 101,
quoted in (Langford, p. 416)).
A potent source of bourgeois virtues and a check on bourgeois vice is the premium that a bourgeois society puts on discourse. The bourgeois must talk. The aristocrat
gives a speech; the peasant tells a tale. But the bourgeois must in the bulk of his transactions talk to an equal. “I will buy with you, sell with you, talk with you, walk with
you, and so following.” It is wrong to imagine, as modern economics does, that the
market is a field of silence. (Or at least it is wrong in anything but wholly perfect competition, and in such conditions, as has been realized for a century, there is a paradox of
silence, solved on the blackboard by such talking constructs as the Walrasian auctioneer.)
For one thing, talk defines business reputation. A market economy looks forward and depends therefore on trust. The persuasive talk that establishes trust is of
course necessary for doing much business. This is why co-religionists or co-ethnics deal
so profitably with each other. Avner Greif has explored over and over the business
dealings of Mediterranean Jews in the Middle Ages, accumulating evidence for a reputational conversation: in 1055 one Abun ben Zedaka of Jerusalem, for example, “was
accused (though not charged in court) of embezzling the money of a Maghribi trader.
When word of this accusation reached other Maghribi traders, merchants as far away
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Sicily canceled their agency relations with him.”468 A letter from Palermo to an Alexandrian merchant who had disappointed the writer said, “Had I listened to what people
say, I never would have entered into a partnership with you.” Reputational gossip,
Greif notes, was cheap, “a by-product of the commercial activity [itself] and passed
along with other commercial correspondence.”469 With such information, cheating was
profitless within the community, though sometimes not so profitless outside it.
Old Believers in Russia during the eighteenth and nineteenth centuries held a
similar position. The Old Believers refused to adopt the late seventeenth-century reforms in the Russian church, and were in other ways far from progressive. Yet because
of their peculiarity they were able to establish a speech community within the larger society. Old Believers on the northern River Vyg, for example, were able in the early
eighteenth century to become major grain merchants to the new St. Petersburg “by utilizing their connections with the other Old Believers’ communities in the southern parts
of the country.”470 Sir William Petty observed at the time that “trade is not fixed to any
species of religion as such, but rather to the heterodox part of the whole.”471 Any distinction will suffice. Thus Mennonites dominated the Dutch grain trade in the Golden
Age and after. Quakers were great merchants in eighteenth-century England. The
overseas Chinese, segregated from the rest of the population (and therefore able to talk
inexpensively with each other about breaches of contract among their own), are more
successful in trade than their cousins at home.
Defoe (Complete English Tradesman, 1726) notes that the Quakers were the originators of the fixed price offer usual now in rich countries, though he claims that “they by
degrees came to ask, and abate [that is, bargain], just as other honest tradesmen do.”
“These are, as I call them, ‘trading lies’ . . . [T]he honest tradesman does avoid them as
much as possible.” But he sees it as silly to “pretend to go back to the literal sense,”
which would make “it impossible for tradesmen to be Christians.” A trader who intends to pay at the end of the week and finds herself sometimes embarrassed, yet at
length pays, is not a liar, but merely in business in a world without certitude. The “lie,”
Defoe avers, is no more serious than what he calls “table-lies” (“Your pie, Granny, is the
best I’ve ever tasted”) or “salutation-lies” (“What a lovely outfit!”).
The aristocrat does not deign to bargain. Hector tries to, but Achilles replies:
“argue me no agreements. I cannot forgive you./ As there are no trustworthy oaths between men and lions,/ Nor wolves and lambs have spirit that can be brought into
agreement.”472 The Duke of Ferrara speaks of his last duchess there upon the wall looking as if she were alive, “Even had you skill/ In speech—(which I have not)—to make
your will/ Quite clear to such an one . . . . / —E’en then would be some stooping; and I
choose/ Never to stoop.” The aristocrat never stoops; the peasant stoops to harvest or
to run the machine; the bourgeois stoops daily to make his will quite clear, and to know
468
469
470
471
472
Greif 1989, pp. 868-69.
Greif, pp. 871, 880.
Gerschenkron 1970, p. 19.
quoted in Gerschenkron, p. 45.
22: 261-263.
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the will and reasons of the other. The aristocrat’s speech is declamation, imitated by the
professoriate. The aristocrat’s proofs are like commands, which is perhaps why Plato
the aristocrat and rationalist loved them so. Plato, it needs to be remembered, was a
conspirator against democracy, a disdainer of law courts, a hater of poets, a friend of
tyrants, a designer of closed societies. His proofs modeled on the new Greek mathematics convince, vincere, conquer. [Go to his fattest statements in Gorgias or whatever
and get the Greek he uses] The bourgeois by contrast must persuade, sweetly, suadeo,
from the same Indo-European root as “sweet." As Plato does, of course, every time we
pick him up and read.
About a quarter of national income, to be statistical about it, and to speak of
many people motivated by profit, is earned from such merely bourgeois and feminine
persuasion: not orders or information but persuasion, “sweet talk,” you might say. One
thinks immediately of advertising, but in fact advertising is a tiny part of the total. Take
the detailed categories of employment and make a guess as to the percentage of the
time in each category spent on persuasion. For example, read down the roughly 250
occupations listed in “Employed Civilians by Occupation” (Table 602) in the Statistical
Abstract of the U. S. (2007) looking for the jobs with a lot of sweet-talking, or on the contrary the jobs without any of it. The 125,000 “appraisers and assessors of real estate” are
not in an honest economy open to human persuasion, as any American knows who has
had a house appraised recently. The 243,000 firefighters just do their jobs, with little
talk---although one sees here the depth of sweet talk in a modern economy, because of
course a firefighter with colleagues in a burning building does actually a good deal of
talking, and sometimes engages in urgent persuasion. The 121,000 aircraft pilots and
flight engineers persuade us to keep our seat belts fastened until the plane arrives at the
gate and the seat-belt sign is turned off. But that’s a trivial part of their job---though
again think of the supervisory roles they often assume, and the sweet talk needed to
keep the crew cooperating. The 1,491,000 construction laborers are not known for persuasive language, except in the old days when a pretty girl walked by, such as Dil in the
movie The Crying Game. But anyone who has actually worked in such a job knows the
necessity to get cooperation from your work mates, to soothe the feelings of the boss, to
be a regular guy or gal: sweet talk. But set all those jobs aside.
Out of the 142 million civilian employment in 2005 it seems reasonable to assign
100 percent of the time of the 1,031,000 lawyers and judges to persuasion, or being an
audience for persuasion; and likewise all the 154,000 public relations specialists and the
large number of “Social, recreational, and religious workers” (such as counselors, social
workers, clergy), 2,138,000 of them persuading people how to live.
Managers and supervisors of various sorts are the biggest category to which it
seems reasonable to assign a somewhat lower figure, 75 percent of income earned from
sweet talk. In a free society the workers are not merely peremptorily ordered about, to
be beaten with knouts if they do not respond. They need to be persuaded. What the U.
S. Census Bureau styles “managerial occupations,” such as CEOs, school principals,
marketing managers, and the like are a massive 14.7 million, fully 10 percent of the labor force. Adding the “first-line supervisors” scattered over all sectors---which I sup-
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pose similarly to be a workforce earning 75 percent of its earnings from persuasion--such as in construction and personal services and gaming (i.e. gambling) workers, adds
another big 5.5 million. Add 380,000 for personal financial advisors. The 150,000 editors and (merely) 89,000 news analysts, reporters, and correspondents are probably 75percent folk. They imagine themselves to be doing “straight reporting,” but it doesn’t
take much rhetorical education to realize that they must select their facts persuasively
and report them interestingly in sweet words. Likewise the enormous 13.4 million
salespeople (which excludes 3.1 million cashiers) are reasonably put down as 75-percent
sweet talkers. “The dress is you, dear.” It may even be true. In my experience, actually,
it usually is. We exaggerate the amount of lying that salespeople engage in.
At 50-percent persuaders we can put down loan councilors and officers (429,000:
like judges, they are often professional audiences for persuasion, saying yes or no after
listening to your sweet talk, and gathering your information), human resources, training, and labor relations occupations (660,000: “Mr. Babbitt, I just don’t think you have
much of a future at Acme”), writers and authors (we are merely 178,000), claims adjusters and investigators (303,000), and a big category, the 8,114,000 educational, training,
and library occupations, such as college professors (1.2 million alone) and nursery
school teachers.
A mere quarter of the effort of the 1,313,000 police and sheriff’s patrol officers,
detectives and criminal investigators, correctional officers, and private detectives, one
might guess, is spent on persuasion. That’s what they’ll tell you (actually the ones I’ve
talked to put it at higher than a quarter; one way of backing all this up would be to do
in-depth interviews, probing in a job for sweet talk as against mere information or coercion or physical activity; or riding along in the squad car and listening). In health care
anyone who has worked in it knows that sweet talk is important, to get the patient to
stay on his medicine, of course, and to coordinate with other care-givers, to advocate for
the patient, to deal with insurance companies and hospital administrators (some of
whom are included above in the managerial category). But the large group of “health
care practitioners and technical occupations” needs to have the technical occupations (xray technicians, medical records technicians, and so forth) removed, leaving physicians,
dentists, nurses, speech pathologists, and so forth actually talking to patients and each
other, for a total of 7,600,000 talkers persuading for a quarter of their economic value.
Perform the mental experiment (which is still another way to back it up): imagine a
speech pathologist, an occupation I am familiar with, with no persuasive skills whatever, and imagine how much less valuable she or he would be. The 353,000 paralegals
and legal assistants figure in the one-quarter category, too. The quarter sounds low.
The occupations I mention alone, without hunting in putatively un-persuasive
categories like mail carriers or bus drivers or “life, physical, and social science occupations” (within which are buried many of the persuasive economists and law professors
themselves), amount to 36,100,000 equivalent workers---that is, weighted by 1.0, 0.75,
0.50, or 0.25 as the case warrants and then added up. That was in 2005 about a quarter
of the income-earning numbers of private employees in the U. S. Weighted instead by
dollar incomes, considering the big role for managers and supervisors (about 20 mil-
264
lion, remember, out of all the 142 million workers), who are of course paid much more--these days sometimes grotesquely more---than the people they persuade to work hard
and long and well, the share would probably be larger still.
A similar calculation for 1988 and 1992, using the slightly different categories
available for those years, yielded similar results (Klamer & McCloskey, 1995). Somewhat surprisingly the weight of sweet talk in the economy has not risen since then--though if police and health-care workers were put in the 50-percent category, and educators in the 75 percent, as the earlier calculations assumed, the share of persuasive
work in 2005 would nudge up to 28.4 percent of the total.
The calculation could be improved with more factual and economic detail; for instance, the workers as I just said could be weighted by salaries; the marginal product of
persuasion could be considered in more detail; the occupational categories could be
subdivided; the premium to better persuasion could be estimated from sales commissions or promotions; squad cars could be ridden in, and---as Ronald Coase in fact did to
discover transaction costs and as Robyn Penrose in fiction did to discover persuasion -the managers could be shadowed. I intend here only to raise the scientific issue, not to
settle it.
The result can be checked against other measures. John Wallis and Douglass
North reckoned that fifty percent of American national income was Coasean transaction
costs, the costs of persuasion being part of these (1986). Expenditures to negotiate and
enforce contracts---their definition of transaction costs---rose from a quarter of national
income in 1870 to over half of national income in 1970 (Wallis & North, 1986, Table
3.13). Their measure is not precisely the one wanted here. Transactions costs include,
for example, “protective services,” such as police and prisons, some of whose income (I
am claiming three quarters of it) is “talk” only in an extended and sometimes physically
violent sense. Literal talk is special—in particular it is cheap, as guns and locks and
walls are not—in a way that makes it analytically separate from the rest of transaction
costs.
Not all the half of American workers who are white-collar talk for a living, but in
a not-very-extended sense many do, and more so as office work gets less physical in
typing and filing and copying. So for that matter do many blue-collar workers persuading each other to handle the cargo just so, and especially pink collar workers dealing all day with talking people. And a good percentage of the talkers are persuaders.
The secretary shepherding a document through the company bureaucracy is often
called on to exercise sweet talk and its evil twin, veiled threats. If she can’t use sweet
talk she’s not doing her job. The bureaucrats and professionals who constitute most of
the white-collar workforce are not themselves merchants, but they do a merchant’s
business inside and outside their companies. Walk with me, talk with me. What news
on the Rialto? Note the persuasion exercised the next time you buy a necktie. Specialty
clothing stores charge more than discount stores not staffed with rhetoricians. The differential pays for the persuasion: “The fish tie makes a statement.” As Smith said “everyone is practicing oratory.” Not everyone, perhaps, but in Smith’s time a substantial
percentage and in modern times fully twenty-five percent.
265
The same point can be made from the other side of the national accounts, the
product side. The more obviously talkie parts of production amount to a good share of
the total, and much of these is persuasion rather than information or command. Out of
an American domestic product of $11,734 billion in 2004 (Statistical Abstract 2006, Table
650, p. 430) one can sort through the categories of value added at the level of fifty or so
industries, assigning rough guesses as to the percentage of sweet talk produced by
each---80 percent for “Management of companies,” 20 percent for “Real estate rental
and leasing,” 40 percent for “art and entertainment” for example---and get up to about
17 percent of the total. The figure squares crudely with the income side. Persuasion is
anyway big, very big. Economists should stop ignoring it.
Over the very long run of centuries the sweet talk is surely rising as a share of income, and will become very large indeed over the next century. Jobs for peasants, proletarians, and aristocrats are disappearing, and jobs for the talkative bourgeoisie are
what remain. The production of things has become and will continue to become cheaper and cheaper relative to persuasion. A piece of cotton cloth that sold for 70 or 80 shillings in the 1780s sold in the 1850s for 5 shillings, and now adjusting for inflation it sells
for pennies. The cheapening of things first led peasants off the land: three-quarters of
American workers in 1800 worked on farms; forty percent in 1900; eight percent in 1960;
two-and-a-half percent in 1990. The two-and-a-half percent produced 800 times more
than the three-quarters had. A lawyer or professor was not much more productive in
1990 than in 1800. But an American farmer was more productive by a factor of 36. The
making of things in factories will go the same way as the preparing of food in kitchens
and the growing of crops on farms. The calculating power---adding, multiplying, and
carrying---that sold for $400 in 1970 sold for $4 in 1990 and 4 cents in 2000. The silent
proletarian labor required to make a radio, a window pane, or an automobile is dropping towards zero. Workers on the line in manufacturing peaked at about a fifth of the
labor force after World War II and have since been falling, at first slowly and now
quickly. In 2003 a mere 2 percent of the civilian labor force was in agriculture, 10 percent in manufacturing. What is left is hamburger flipping and secretarial work on the
one side and bourgeois occupations, largely persuasive, on the other. In fifty years a
maker of things on an assembly line will be as rare as a farmer is now, the nonpersuaders vanishing into the automated background of the economy.
The delivery of information and commands partakes in the euthanasia of the
maker. A farmer can turn on his computer in the morning and know at once the price
of hogs on every exchange. A single electronic source of information on the hog prices
does the work of fifty newspapers. When a Grameen bank finances the purchase by a
local woman of a cell phone the farmers in her neighborhood suddenly know for sure
the prices on offer in Dhaka. In an army the order to march can be conveyed cheaper
by radio than by a lieutenant on a horse. Information and commands become cheaper
and cheaper.
But persuasion does not become cheaper. It will not go the way of goods and information, the subject of conventional economics since Bentham, into close-to-zeroopportunity-cost extinction. The decision what to do with the farmer’s hogs, knowing
266
all there is to know about prices, is still made in the kitchen council by farmer and son
and wife, persuading each other; or in the councils of the farmer’s mind. The decision
about where to send the regiments, into the Wheat Field or around the Union left, is still
a matter of persuasive talk.
And sweet talk is sometimes adversarial. If the other salesman has a computerassisted video to persuade the customers, then you as his competitor will need one, too.
If the defense attorney in a product liability case starts hiring economists to testify that
Fisherian statistical significance is true science, then the plaintiff’s attorney, if she has
good sense, will start hiring economists to persuade the judge that Fisherian statistical
significance is nonsense. If teachers get better at persuading people to read books, then
television executives will devote more resources to persuading them to watch reruns of
Sex and the City.
The technology is irrelevant, and therefore the fevered talk about the “information society” and the economist’s over-simple focus on bits of information is misleading. Persuasion is in this way like pure queuing. The time (or something else) must
be spent in a queue somehow or else the queuing will not serve its function of allocating
bread or gasoline or Bears season tickets being sold for below the market price. Oregon
Plans, queue tickets, and other technology of queuing, we Chicago economists delight
to point out, have no effect at all on the amount spent, when time and other inconvenience is measured at its money value.
Likewise, persuasive energies must somehow be spent arguing, or else the persuasion will not serve its function of allocating decisions to the proper side. (This, by
the way, is good news for lawyers, politicians, advertisers, poets, and the like.) The
economic problem is that the decision making itself, unlike the acquisition of information or cotton cloth, is intrinsically costless. After all, we could decide in an instant
henceforth never to produce anything different from what we produced today, as rotten
as such a plan would be. Do tomorrow exactly what you did yesterday. The decision
to adopt such a Groundhog-Day central plan would take the stroke of a dictator’s pen.
Since it is not intrinsically costly (unlike the very production of information or orders,
which require costly paper and computers and loudspeakers) decision-making has to be
made, so to speak, artificially costly.
These then are facts, historical facts---not schoolbook history, not Mr. Wells' history, but history, nevertheless. They create a big problem for conduit-metaphor economics. The problem is that economics after---but not including---Adams Smith has no
room for persuasion. And yet one quarter of national income is earned by it. It would
be as though economics had no room for an analysis of land and physical capital, which
in some periods earned as much as one quarter of national income---though these are
falling, while the earning of sweet talk gradually but inevitably rises.
*
*
*
*
*
Is the persuasive talk of the bourgeoisie then “empty,” mere comforting chatter
with no further economic significance? If that was all it was then the economy would
267
be engaging in an expensive activity to no purpose. A quarter of national income is a
lot to pay for economically functionless warm and fuzzies. The fact would not square
with economics. The businesspeople circling La Guardia on a rainy Monday night
could have stayed home. The crisis meeting in the plant cafeteria between the managers and the workers would lack point. Wasteful motion, or empty words, sit poorly
with conventional economics. By shutting up we could pick up a $20 bill (or more exactly a $1,500,000,000,000 bill). That cannot be. A quarter of our working time in the
marketplace is spent in persuasive converse.
Adam Smith knew. The second chapter of The Wealth of Nations speaks of “the
faculty of . . . speech.” The book does not again speak of the faculty of speech in a
foundational role, though Smith, who began his career as a teacher of rhetoric, did remark frequently on how business people and politicians talked together. In The Theory
of Moral Sentiments he calls speech “the characteristical faculty of human nature.”473 The
other half of his foundational formula, the faculty of reason, became in time the characteristic obsession of economists. Smith himself did not much pursue it. Economic Man,
rationally seeking, is not a Smithian character. It was later economists, especially Paul
Samuelson during the 1940s, who reduced economics to the reasoning of a constrained
maximizer, Seeking Man, Homo petens. The seeking has a peasant cast to it: the maximization of known utility under known constraints sounds more like Piers Ploughman
than Robinson Crusoe. The utilitarian reduction of all the virtues to one maximand
makes all virtues into prudence. The wind-up mice of modern economic theory know
nothing of integrity, humor, affection, and self-possession. Smith’s notion of Homo loquans squares better with the varied virtues of the bourgeoisie.
The high share of persuasion provides a scene for the bourgeois virtues. One
must establish a relationship of trust with someone in order to persuade him. Ethos, the
character that a speaker claims, is the master argument. So the world of the bourgeoisie
is jammed with institutions for making relationships and declaring character, unlike
that of the aristocracy or peasantry, who get their relationships and characters readymade by status, and who in any case need not persuade. Thomas Buddenbrook bitterly
scolds his unbusinesslike brother, a harbinger of bohemianism in the family: “In a company consisting of business as well as professional men, you make the remark, for everyone to hear, that, when one really considers it, every businessman is a swindler---you,
a business man yourself, belonging to a firm that strains every nerve and muscle to preserve its perfect integrity and spotless reputation.”474
The class work of an Austen novel is not done by portrayal of the middle class
but by the effect on the implied audience. The virtues recommended are not those of
aristocrats or (and this is more surprising in the devout daughter of a clergyman) Christian. They are bourgeois, which is to say, helpful for a life in commerce. [Check this.]
So notes Walter Benn Michaels (refer to him).
473
474
1790 [1982], VII.iv.25, p. 336.
Mann 1901 [1952], p. 247.
268
The bourgeoisie works with its mouth, and depends on word of mouth. Buddenbrooks is not social history (though Mann was proud of having “intuited and invented the thought that modern-capitalist acquisitive man, the bourgeois with his ascetic
ideal of professional duty, is a creature of the Protestant ethic, completely on my own,
without reading . . . learned thinkers, namely, Weber, Troeltsch, Sombart.”475) It imagines rather than reports Mann’s own family of Lübeck grain merchants. But if it testified
to the attitudes towards the bourgeoisie only in 1901 (and Mann did go to a good deal
of trouble to get his family history right) rather than in the 1850s it would still weigh. 476
The fictional Tom speaks in the 1850s of his grandfather during the Napoleonic Wars:
“he drove in a four-horse coach to Southern Germany, as commissary to the Prussian
army---an old man in pumps, with his head powdered. And there he played his charms
and his talents and made an astonishing amount of money.”477 Fix here At the crisis of
1848 the Assembly is trapped by a mob in the town hall. “The natural instinct towards
industry, common to all these good burgers, began to assert itself: they ventured to bargain a little, to pick up a little business here and there.”478 Charming the generals, chatting with the miller, picking up a little business here and there.
On the other hand, idle talk is not bourgeois. Idle, artistic, romantic talk is a habit of the new bohemians sprung from the bourgeoisie, adumbrated in Christian Buddenbrook, of whom Tom the bourgeois says, “There is such a lack of modesty in so
much communicativeness . . . . Control, equilibrium, is, at least for me, the important
thing. There will always be men who are justified in this interest in themselves, this detailed observation of their own emotions, . . . poets” or indeed novelists like Heinrich
and Thomas Mann.479
Now of course the sweet talk among the bourgeoisie can be parodied, and has
been for two centuries to the point of tedium. “Everybody puts his best foot forward
before strangers. We all take care to say what will be pleasant to hear.”480 The intellectuals can sneer at the vulgarity of business talk (“Run it up the flagpole and see if anyone salutes”), “the clumsy but comfortable idioms which seemed to embody to [the
burgers] the business efficiency and the easy well-being of their community.”481
And speech of course can be false. In Buddenbrooks Grünlich is the bad bourgeois, a mere acquirer. His false speech is aimed from the beginning at acquiring Antonie and her fortune: “He regarded her with the air of a satisfied possessor.”482
Grünlich gets his rival for Antonie’s hand out of the way by committing the worst sin
among the bourgeoisie, lying about a contract: he claims falsely that she had promised
him. It develops that he was lying, too, about his firm’s prosperity. At first he seems to
475
476
477
478
479
480
481
482
Gay 2002, p. 117n.
Gay 2002, p. 114n.
p. 210.
pp. 147-148.
p. 207.
p. 77.
p. 20.
p. 125.
269
the elder Buddenbrook “an agreeable man, and well recommended, the son of a clergyman. I have business dealings with him.”483 Grünlich “talked business and politics,
and spoke soundly and weightily.”484 Buddenbrook is later “wounded in his pride as a
merchant, . . . the disgrace of having been so thoroughly taken in,” taken in by a torrent
of sweet words.485
Bourgeois friendship is false in aristocratic or peasant terms. Tom’s father recalls
his own business experiments as a young man: “My journey to England had for its chief
purpose to look out for connections there for my undertakings. To this end I went as far
as Scotland, and made many valuable acquaintances.”486 These acquaintances of which
one hears so much in a bourgeois society are hardly friends on the aristocratic model of
Achilles and Patroclus. The friends could turn, exhibiting “all the sudden coldness, the
reserve, the mistrust at the banks, with ‘friends,’ and among firms abroad which such
an event, such a weakening of working capital, was sure to bring in its train.”487
The virtues of the bourgeois are those necessary for town life, for commerce and
self-government. The virtue of tolerance, for example, can be viewed as bourgeois. The
experience of uncertainty in trading creates a skepticism about certitudethe arrogant
and self-possessed certitude of the aristocrat or the humble and routine certitude of the
peasant. As Arjo Klamer has pointed out to me, “the dogma of doubt” is bourgeois.
City air makes one free.
Bourgeois charity, again, if not the “charity,” meaning love, of the King James
translation of the Bible, runs contrary to the caricature of greed. More than the peasant
or aristocrat the bourgeois gives to the poor as in the ghettos of Eastern Europe or in the
small towns of America. Acts of charity follow the bourgeois norm of reciprocity. The
American Gospel of Wealth, founding hospitals, colleges, and libraries wherever little
fortunes were made, is a bourgeois notion, paying back what was taken in profit. Middle class people in the nineteenth century habitually gave a Biblical tenth of their incomes to charity. The intrusion of the state into charity killed the impulse, remaking
charity into a taille imposed on grumbling peasants: I gave at the office.
*
*
*
*
Economists since Bentham have viewed talk as cheap and culture as insignificant. Yet humans are talking animals, and the animals talk a great deal in their forums,
agoras, marketplaces. Of course the economist does not have to pay attention to everything that happens in an economy. That farmers chew tobacco or paint traditional designs on their barns while dealing in corn does not necessarily have to appear in the
econometrics. What would have to appear is a large expenditure, since expenditure is
the economist’s measuring rod.
483
484
485
486
487
p. 72.
p. 78.
p. 181.
p. 137.
p. 164.
270
Economics as presently constituted does not acknowledge the fact (if it is a fact: I
repeat that the calculation would need much elaboration to be scientifically persuasive).
The conversation of the economy is taken as irrelevant to economic science. As the late
Don Lavoie put it, “economists seem to agree that the scientific discourse of economics
should dissociate itself from the everyday discourse of the economy.” He observed dryly, “Economists are not so clear why they think this.”488
The economy, one might say from the statistics, “rests” on persuasive talk. Yet
economists, to repeat a point of methodology obvious to economists but obscure to
most of their critics, are not required to pay attention even to everything the economy
“rests” on. It also rests, for example, on engineering, but in speaking of the economics
of bridges and other social overhead capital an economist does not need to know about
the equilibrium equations for three-dimensional rigid bodies.
In the present case, when economists can reduce some transaction to a silent
physical action, they can properly ignore the talk, at least in its effects on the equilibrium price. Adam Smith, to continue the quotation from Lectures on Jurisprudence, said
that persuasion, “being the constant employment of trade of every man, in the same
manner as artisans invent simple methods of doing their work, so will each one here
endeavor to do his work in the simplest manner. That is bartering, by which they address themselves to the self interest of the person and seldom fail immediately to gain
their end.”
Of course, a sociologist would point out that the institutions of a bartering grocery store “rest” on all manner of talk, such as the giving of orders to the junior grocery
clerk to spend the next hour fronting the stock in aisles 6 through 8. The anthropologist
reminds economists that “behind” their market lies a culture, which is another talking
matter. But given the culture and the institutions (a big given, admittedly), and confining attention to the immediate result, if the clerk does not like the assignment he can silently walk, exercising his option of what Albert Hirschman calls “exit.”489 He is not a
slave. Likewise, a man who tries to haggle with his local grocery store about the price
of a quart of milk is wasting his breath and wasting the grocer’s time. If he thinks he
can get a better price down the street, he can walk. If the grocer thinks the next customer will pay the price, he can ignore the haggler. The talk in such cases is not essential
for the economics.
Walk or talk. To put it another way, that many transactions involve talk may be
interesting but need not be a criticism of economics. The physical walking may still set
tight limits on what can be charged. People bargain over houses and automobiles, talking a lot, yet no one will be talked into selling a four bedroom apartment overlooking
Central Park for $3.57 or into buying a ‘77 Chevy with a little rust and 220,000 miles for
$500,000. The customer will walk away from such offers. What matters is the size of
the “gold points” within which silent trade confines the price. If the gold points are
488
489
Lavoie 1990d, pp. 170, 169.
Hirschman 1970.
271
narrow, the talking does not change the deal. If they are wide, however, it may well
change it.
A case of wide gold points, by definition, is pure bargaining. Two people meet
in the middle of the Sahara, alone. One person has plenty of water but no food; the other plenty of food but no water. At what price will the deal take place? Obviously, it
depends on the bargaining skills of the two. Economists, truth be known, have not
made much progress in understanding situations of pure bargaining. Game theory for
all its wonders has not gotten far on the matter.490
The theoretical impasse arises because bargaining is talk, all the way down. As
the food owner in the Saharan encounter, Arjo claims forcefully that he has a physical
ailment requiring an unusual amount of both water and food. Deirdre detects a ruse,
and offers little of her water in exchange for his pound of food. Arjo weeps affectingly;
Deirdre’s heart softens, and she hands over half her water. Or she laughs sardonically
(she is a hard lady) and portions out to Arjo a tiny swig in exchange for most of his
food. It depends on talk.
This unsatisfactory conclusion relates to a basic feature of speech, that it can apparently be trumped, cheaply, in a way that sweaty physical action cannot. Suppose
you devised a rule that would predict the bargaining speech of lonely owners of water
in the middle of Sahara. Would this permit you to extract the water at a low price? No.
As economists have pointed out repeatedly, if one person is predictable, the other can
exploit the predictability, which will suggest to the exploited one that he had better
randomize. If you’re so smart about bargaining, why ain’t you rich?
A limit on calculability is a feature of any speaking. If anyone could get their
way by shouting, for example, then everyone would shout, as at a cocktail party, arriving by the end of the party hoarse but without having gotten their way. The philosopher H. P. Grice affixed an economic tag to the trumping of speech conventions, “exploitation.” The linguist Stephen Levinson puts his finger on the limits of formalization
when language is involved: “[T]here is a fundamental way in which a full account of
the communicative power of language can never be reduced to a set of conventions for
the use of language. The reason is that wherever some convention or expectation about
the use of language arises. there will also therewith arise the possibility of the nonconventional exploitation of that convention or expectation. It follows that a purely . . .
rule-based account of natural language usage can never be complete.”491
A joke among linguists makes the point (the story is said to be true). A pompous
linguist was giving a seminar in which he claimed that while there were languages in
which two negatives made a positive (as in Received Standard English: “I did not see
nobody” = “I saw somebody”) or two negatives made a negative (standard Italian:
“Non ho visto nessuno” = “I did not see nobody” = “I did not see anybody”), there are no
languages in which two positives made a negative. Pause. Then a smart aleck in the
490
491
Fisher 1989, esp. p. 122
Levinson 1983, p. 112.
272
back row says loudly, with a sneer in his voice, “Yeah, yeah.” Any rule of language can
be trumped for effect.
The game theorist Joseph Farrell has made a similar point in a paper of his called
“Meaning and Credibility in Cheap-Talk Games.”492 What I call “trumping” he calls
“neologism,” and finds that games are sensitive to its use. “We could conclude that we
have no satisfactory positive theory in a one-shot game [a conclusion which may explain the unpopularity of the paper with referees]. . . . Games should be taken in context, especially when analyzing the effects of communication. Language that could not
survive in equilibrium if the world were nothing but a particular game, can nevertheless affect the outcome of the game.”493
Economists specialize in knowing about costs and benefits. But someone—
maybe even a specialized economist—might want to learn about the speech by which
people construct their stories the cost and benefit. Maybe some useful economics can be
done, or the existing economics modified. Adam Smith, as usual, put the issue well.
The division of labor is the “consequence of a certain propensity . . . to truck, barter, and
exchange. . . . Whether this propensity be one of those original principles in human nature, of which no further account can be given; or whether, as seems more probable, it
be the necessary consequence of the faculties of reason and speech.”494 Smith, who began
his career as a teacher of rhetoric, remarked frequently on how business people and politicians talked together. Half of his foundational formula, the faculty of reason, became
in time the characteristic obsession of economists. Smith himself did not much pursue
it. Economic Man, whether speaking or seeking, I have noted, is not a Smithian character.
Speaking Man has never figured much in economics, even among institutionalist
economists. A man acts, by and for himself. That is what utility functions or institutions or social classes or property rights are about. No need to speak. Smith would
have disagreed. Towards the end of The Theory of Moral Sentiments he dug behind the
faculty of speech (which led to the propensity to exchange, which led to the division of
labor, which led to the wealth of nations). He connected it to persuasion, which is to
say, speech meant to influence others: “The desire of being believed, the desire of persuading, of leading and directing other people, seems to be one of the strongest of all
our natural desires.”495 Compare his Lectures on Jurisprudence, in the passage quoted:
“Men always endeavor to persuade others . . . [and] in this manner every one is practicing oratory through the whole of his life.” Though always Smith, and his contemporaries, admitted payment as a form of persuasion: “Sir, you may make the experiment,”
said Johnson to Boswell. “Go into the street, and give one man a lecture on morality,
and another a shilling, and see which will respect you the most.”496
1988.
Farrell p. 19.
494 p. 336, italics supplied
495 p. 336.
496 Life, I, p. 272; get date.
492
493
273
Here maybe an empirical measurement of contacts increasing in
18 century. Three stages. Self-sufficiency  silence. Handicraft 
chat. Industry (what Frank Knight called an "enterprise" economy, with
his wheel of wealth)  conversation. Complex speech, signaling, many
stages of production, millions of interactions implied.
th
274
Chapter 29
Sweet Talk is Virtuous
Economics as an academic field has with language is that it ignores the language
used by economic actors. Adam Smith, whose first job was teaching English composition to high-school age students in Scotland, and who wrote a little unpublished book
on rhetoric, would be distressed at how uninterested in language his offspring have become. Smith was indeed, with a few partial exceptions in Austrian and old institutional
economics, the first and alas almost the only economist to acknowledge that language,
and therefore the ethical reflection he called the “impartial spectator,” matters to how
the economy works.
Understand, though, that bringing language into thinking about the economy
does not necessarily trash everything that economists have already discovered. I do not
wish to bring comfort to humanists who detest mathematics and statistics, for example,
or people of the left who detest everything about what they call “neoclassical” economics, by which they often mean, to be particular, my beloved Chicago School.
In 2002, for example, Bernhard Guerrien launched an attack on those of us of
Chicago and elsewhere who believe that supply and demand curves are pretty neat
stuff (Guerrien, 2002). Guerrien notes that supply and demand curves assume a "given" price. This is of course correct. But he then argues that there is no conceivable
source for the givenness except the patently absurd fiction of a Walrasian auctioneer,
the fellow whom Léon Walras is thought to have imagined in 1874 (he didn’t actually:
the phrase is a later attribution) as the person who adjusts excess supplies and demands
in a market by literally shouting out new prices. The criticism is incorrect, and can be
seen to be incorrect as soon as we bring language seriously into our view of the economy.
What's incorrect about the criticism, an old one, actually, is that there is a source,
an obvious one, for “given” prices, though neglected by the Walrasian-Samuelsonian
economics that Guerrien and I join in criticizing. The obvious source is also ignored by
Marxist economics, neo-institutional economics, post-Keynesian economics, behavioral
economics, law and economics, much of the rest of economics, and even I believe by
economic sociologists. The only economists who so much as mention it are the Austrians and the old institutionalists I mentioned, which is one reason I count myself a fellow traveler of these disdained little groups.
The missing source is conversation, rhetoric, language, sweet talk itself. The
price gets its givenness from the literal conversations that go on in markets. I do not
mean by "conversations" only the putting and taking of offers, surrounded otherwise, as
has been assumed in economic theory since Jeremy Bentham, by stony silence. To be
sure, mere money offers are, Smith had noted, a variety of persuasive talk: "The offering of a shilling, which to us appears to have so plain and simple a meaning, is in reality
offering an argument to persuade one to do so and so as it is for his interest" (Smith,
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1762-3/1978/1982), p. 352). But people do not merely silently offer shillings and silently hand over haircuts. People do not in fact behave in the manner supposed in “autistic” economics (as rebellious French economics students have called it), the manner that
Guerrien assumes---as vending machines. They talk, or as Arjo Klamer puts it, they
converse.
And in conversing they open each other to modifications of the price, it may be,
and anyway they establish, as we say, the "going" price. Every market participant,
wrote Smith, "is practicing oratory. . . . In this manner . . . [he] acquires a certain dexterity and address in managing their affairs, or in other words in managing of men [and
women, dear Adam, if you please]; and this is altogether the practice of every man in
the most ordinary affairs." The ordinary affair of economics itself, for example. The going idea in Samuelsonian economics, we advocates of a humanistic science of economics
say with indignation, has long been the crazy idea that people do not converse. The
Samuelsonians are mistaken.
Of course, in a large market or a large conservation a small voice is seldom
heard. That’s what an economist means by “givenness,” and was the point of Albert
Hirschman’s pregnant distinction among the three tactics one can use when faced with
an unhappy social situation: exit, voice, or loyalty (Hirschman, 1970). There is little
point in driving to an enormous California supermarket and initiating an aggressive
conversation with the manager about the price of milk. You had better wait until you
are talking to your friend the local shopkeeper, perhaps, who might actually respond,
persuading you in the ensuing conversation that nothing is to be done, because after all
he is in turn a small voice in the market for milk. Or you might, as an economist, wait
until you are talking to the Milk Board, which sets the wholesale price of milk, though
doubtless it does so after much talk with fellow Board members and with politicians
and with Ministry of Agriculture functionaries. You might change their minds, and so
their talk, and so the price, a bit. You certainly could change some weak minds if you
were, to take an impossibly extreme example, the President the United States, say, and
wanted to redefine the word "torture."
The situation in markets is identical to that of language. No prudent person
would initiate conversations with strangers on the bus about the definition of
"givenness" in economic theory. If she does she can expect them to edge away from her.
She will instead wait until she is talking to other economists, at any rate to economists
imagining in their conversations a post-autistic economics that is not so dogmatically of
the Left that it objects to every idea that the cursed bourgeois economists have articulated. We use the French word amour or the English word love without stopping to quarrel
about their meanings, or insisting that love actually means "hate," or "light bulb," or "the
train will arrive in six minutes." That is, the on-going conversation of language---I note
that Walras' colleague Saussure made this point a century ago---gives to us mere ordinary speakers of a language a set of distinctions serving to define what's on offer in
French or English by way of sheep/mutton as against mouton. In the same way, Friedrich
Hayek pointed out long ago, prices are “given” only in the sense that the search procedure of a market conversation coughs them up, out of bids and offers formed from
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“knowledge initially dispersed among all the people” (Hayek, 1945, p. 520). Hayek
didn’t emphasize quite as much as he should have the conversation that does the trick.
Guerrien will perhaps reply that the going price, or meaning, is just an instance
of bargaining. But I think he and I agree that if bargaining in a strictly game-theoretic
way is what we are talking about, then we should abandon all hope for a useable economics. The Folk Theorem showed some time ago that in a properly infinite game and
an assumption of prudence only you can get an infinite number of equilibria. As some
game theorists put it, “game equilibrium models of rational play lead to an outcome set
where players can do almost anything and still be consistent with the theory. The prediction that individuals might do anything from a large set of feasible strategies is neither useful nor precise” (Ostrom et al., 1994, p. 322). Prudence-only game theory, without social agreements of solidarity and justice on how a conversation can change minds,
has no implications. None at all: change the assumptions, change the equilibrium. And
in every empirical test on offer, this or that set of prudence-only assumptions has failed.
Unlike supply and demand curves.
A price is not set usually by silent bid-offer, move-countermove game bargaining, with its intrinsic paradoxes, an elderly example of which Guerrien has repeated.
Price is not set by an auctioneer in most markets---though I wonder what Guerrien
would make of the Alsmeer flower market in Holland, with its Dutch-auction clocks
ticking the price down; or of the remaining open-outcry pits at the former Chicago
Board of Trade. Most prices get their meaning and in particular the givenness of their
meaning from the economic conversation. Just as amour has a more or less given meaning in French, or torture in English, modifiable at the edges by particularly persuasive
talkers, or, to speak of the main source of actual linguistic change, by the games that
teenagers play with words, so do dictionary-makers face a more or less given money
price for their product. Larrousse cannot suddenly decide to charge 10,000 euros a copy
for its big French-English dictionary, or even much above the going price. And therefore it lives with supply and demand curves. There is nothing mysterious or selfcontradictory about the situation.
I do not claim that we economists have already figured out how language and
the economy intermesh. In fact, my point here is the opposite. The scientific task still
remains to be done, yielding a humanistic economics, that is, an economics acknowledging humans as talking, singing, story-telling, ethical creatures. Until then the science of economics will be incomplete and paradoxical in the ways that Guerrien has
noted.
Meanwhile, givenness is how we little folk in a large society face any piece of our
culture, such as language itself or the going price of milk. We only need to recognize
that the economy is part of the culture, and of its conversations, to recognize that supply and demand curves do after all work, rather well.
*
*
*
*
Let’s then get down into the details of a humanistic economics that recognizes
talking people. Realize at the outset that the role of language in the economy---as is so
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obviously true of language in economics---is not merely the transmittal of preformed
messages. Language persuades, and when the language speaks us we are changed.
The economist Jacob Marschak wrote a paper in 1968 exploring the “economics
of inquiring, communicating, deciding,” but got no further in thinking about it than the
model of transmittal and gathering of bits of information, such as telephone numbers
and the price of hog bellies. “Data are gathered. They are communicated [note the
word] to the decision-maker. He, on the basis of the message received, decides upon
the action” (Marschak, 1968, p. 2). The only fruit of the sender-receiver metaphor thus
deployed is to observe that “perfection is costly” (p. 3), in other words that encoding
and decoding are costly (see his diagram on p. 5) and are therefore subject to a rational
calculus of cost and benefit. At some point---the statisticians call it the “optimal stopping point”---it’s not worth inquiring any more into the price of 10-year old Toyota Avalons in good condition in Chicago. You probably aren’t going to find a better price,
and anyway the additional search won’t yield enough of a better one to overmatch the
extra search costs.
The same point had been made in 1961 by another economist, George Stigler,
who developed the mathematics more elegantly than Marschak did, and stated the
basic point more eloquently, too: “One should hardly have to tell academicians that information is a valuable resource: knowledge is power. And yet it occupies a slum
dwelling in the town of economics. Mostly it is ignored” (Stigler, 1961/1968, p. 171).
Thanks to economists such as these---Kenneth Boulding, for example (1958, pp.
87-97); or Ronald Coase and his “transaction costs”; or George Akerlof and “asymmetric
information”---the transmittal and gathering of bits of information is no longer ignored
in economics. In fact it could be said to be one of the two main preoccupations of economic theory since the 1960s, the other being further explorations to and beyond the
outer limit of reason of “rational” behavior assuming one has already acquired all profitable information, “non-cooperative game theory.”
But the metaphor of transmittal has narrow limits. When Thoreau was told by
some technology-admirer that the extensions of the new telegraph now made it possible
for “Maine to speak to Texas,” he replied, “But does Maine have anything to say to Texas?” The meaning of the message in economics has been left aside. Do we have anything to say?
Students of communication, rhetoric, linguistics, philosophy, and the like call
“speaking to Texas” the “conduit metaphor.” In 1979 the linguist Michael Reddy gave
fully 141 expressions of the conduit metaphor in English rhetorical practice, such as
“You’ll have to try to get your real attitudes across to her better” (expression-type A,
“implying that human language functions like a conduit,” number 1, p. 311) or “Her
unhappy feelings fell on deaf ears” (type G, “implying that the [bits of information] may
or may not find their way into the heads of living humans,” number 141, p. 320). The
point is, as Reddy puts it, that “English has a preferred framework for conceptualizing
communication, and can bias thought processes toward this framework, even though
nothing more than common sense is necessary to devise a different, more accurate
framework” (p. 285). He gives 45 expressions that when used alone, without the con-
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duit metaphor lurking in the background, imply a quite different framework: for example, “How do you build readings for sentences like that?” Building readings is a cooperative enterprise in a common space, a cooperative game, not a pre-formed bit of information sent hurtling through the conduit, like signed checks whisking in the pneumatic
tube to your drive-in bank teller. My personal metaphor, less felicitous than “the conduit” because it depends on a specifically American cultural reference, is the “RotoRooter theory of communication.” Communication in the Stigler-Marshak-et al. view is
a matter of pipes between minds. If they get clogged , the sending of information costs
more, and so it’s then worthwhile to call the Roto-Rooter man and have the pipes
reamed out, re-establishing clean conduits in which “Your concepts come across beautifully” (Reddy, number 8).
“But wait a minute,” you might say. “What’s wrong with the conduit metaphor?
Isn’t it true? Aren’t we in fact engaged in getting our ideas across and gathering information?”
No, we are not, not entirely. The conduit metaphor describes some part of economic language, such as the report that hog bellies were $0.9283 per pound at 2:30 Eastern time on June 28, 2007. Obviously some language is transmission as through a conduit, as when you give your friend your telephone number or when you inform an economically naïve audience that Ben Bernanke’s portfolio as Fed chief is after all only a
few percent of existing world bonds. Humans do such “communication,” but so do
birds signaling territorial limits, or fish in a school. Trademarks and brands are of
course linguistic items, "signs" literally. Informational advertising would provide some
of the data for a study of social language in this restricted sense, making use of the immense academic literature on marketing, for example. Semiology arises at that point--again in animals and plants as well. Flowering plants are signalers, and co-evolved
with insects and birds and mammals: "Here I am, oh pollinating insect, oh seedspreading bird or mammal."
And beyond the point of honest persuasion in “conveying” information comes
the temptation to lie, “misinformation,” “manipulation,” which is the vulgar, newspaper meaning of “rhetoric.” This we humans have to a notable extent in common with
other great apes---but also indeed with camouflaging plants and animals. Though advertising is, financially speaking, mainly informative or a bond as to quality, notoriously it is sometimes persuasive in dishonest ways. Precisely because signs and signals
and advertising and rhetoric are sometimes not mere information, and meant instead to
change ones mind, humans (and other great apes) are suspicious of rhetoric. It’s one
reason that since the 17th century the study of rhetoric has been devalued, as merely
democratic beside the aristocratic glories of first-order predicate logic.
*
*
*
*
But persuasion, as against informational messages sent through the conduit
without rhetoric or judgment, is in fact a very large item in a modern economy. We
economists have got to stop ignoring the fact, if it’s a fact. We’ve got to stop ignoring
meaning and its making through words.
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*
*
*
*
In explaining the fact of 25 percent of national income being sweet talk a temptation of the modern economist is to try to model it in the style of Samuelson, as the outcome of still another adventure of the prudent person, Max U. The modern economist
does so because it’s her only model. If something---love or justice or courage---does not
fall within a utilitarian maximization subject to a resource constraint, she has nothing to
say. But language, I am suggesting, unless reduced to bits of information, as it cannot
be, cannot be so modeled.
The limits and patterns of human speech do of course limit and give pattern to
the economy. Some conversations are impossible in humans. At the most abstract level, some sort of Chomskyan limits of deep structure might possibly apply, though it
seems doubtful. Perhaps there are deals, orders, desires, plans that would be possible
in a language of another species but are interestingly impossible, or at any rate difficult,
in human language. Beings that were not differentiated individually, for example,
would find orders naturally persuasive in a way that humans do not. Wittgenstein said
that "to imagine a language is to imagine a form of life" (Wittgenstein, 1963, p. 19). He
might as well have said that to imagine a form of life is to imagine a language. "It is
easy," he remarked, "to imagine a language consisting only of orders and reports in battle" (Wittgenstein, 1963, p. 19). An army that is something other than a gang of Homeric
heroes clashing one-on-one in single combat is a form of life that responds to particular
orders issued by particular people. The phalanx on the left flank moves when the general speaks, as though it were an organism and not a collection of free citizens of Athens.
But the binding constraints are much more likely, it seems to me, to be matters of
pragmatics and socio-linguistics than matters of syntax and vocabulary. I have a friend,
a Dutch woman, who built a vacation home on a Greek island. She found that within
Greek society it was impossible, simple impossible, for a woman to tell a male contractor what to do. Her contractor ignored her requests, and she was forced to hire another
Greek, a man, to give the orders. Even that did not work perfectly: an order to have
large waste pipes for the toilets was ignored, with the result that---as is common practice in rural Greece---her soiled toilet paper is not flushable. There's an economic effect.
The formal attempts to extract any interesting constraints that language places on
economic behavior from sheer logic or even from an enriched logic of the rules tha linguists call conversational implicatures has not borne fruit, and seems unlikely to. The
attempt of the game theorist Ariel Rubinstein to do so shows how little can be expected
even from very canny ruminations on evolutionarily stable strategies or a supposition
that the equation ψ = [φ(x,y)∩φ(y,z)∩T]→φ(x,z) is a tautology (Rubinstein, 2000).
But economics still has something to say. To Texas. The economist and rabbi Israel Kirzner put his finger on what a free society achieves, from which we can understand how meaningful language works in one. "It [is] highly desirable to choose among
alternative social arrangements those modes of organization that minimize [ignorance
of knowledge that can be absorbed without decision and search, by the sheer noticing of
it]. . . that is, those modes of organization that generate the greatest volume of sponta280
neous, undeliberate learning" (Kirzner, 1979, p. 147, 145). His assertion runs against the
love of explicitness in modern life, the proliferation of handbooks on leadership and of
axiomatizations of thinking. Surely, the handbook-writer avers, we need to transmit
through a conduit to the student's mind numerous bits of information, and if this can be
centrally planned, all the better. Every schoolchild in France is on the same page at the
same hour of the same day, thanks to the planners in Paris.
But real innovation, Kirzner is saying, entails real ignorance, that us, "knowledge
about which nothing is known" (1979, p. 144). It can be put economically: known
knowledge (shades of Donald Rumsfeld) earns its normal reward. If you know how to
read a balance sheet you do not on that account alone become Warren Buffett, because
so many other people know how to read a balance sheet. Unknown knowledge, on the
other hand, generates supernormal profits. When sometime before 1211 an anonymous
Florentine invented the idea of a double-entry balance sheet, then he, or his Italian imitators, could pick up the profit from the innovation, and did (Origo, 1957/1986, p. 109).
Once the reading of balance sheets is widely known, however, the supernormal profits
fell to zero.
It's still a good idea for people to learn to read balance sheets, engaging in
"search" that has a known reward to the MBA graduate or law student who engages in
it. The opportunity cost of such searching may be good for the society, as against a
worthless search for, say, learning to read the stars astrologically. But it is not an innovation. National income does not actually fall, since learning to read balance sheets has
a marginal product equal to its opportunity cost, at the margin, and therefore has intramarginal gains (“rents” economists call them, if not the “supernormal” profit of real
entrepreneurship), whereas learning to read the stars does not. The intramarginal reward to routine learning sustains the national income. As a matter of fact, as an economist can persuade you in one of her maddening diagrams, it simply is the national income. But national income will not rise unless the innovation is Kirznerian.
"The ease of calculation provided by money," writes Kirzner, "is thus not merely
a device for lowering transaction costs relevant to deliberate search," as the Samuelsonians claim (Kirzner, 1979, p. 150). "It represents a social arrangement with the ability to
present existing overlooked opportunities in a form most easily recognized and noticed
by spontaneous learners." Kirzner makes a parallel point in his writings on entrepreneurship.
Kirzner's analysis is correct so far as it goes. What is missing from it, however, is
language. The alertness that Kirzner thinks of as the essence of entrepreneurship involves language in its fulfillment. Unfulfilled it’s just another bright idea. The necessary, next entrepreneurial step---which Kirzner does not treat---of persuading oneself, a
banker, a supplier, an employee, a customer, oneself is rhetoric all the way down. In
consequence a community of free speech briefly unique to Northwestern Europe after
1700 or so, for example, "represents a social arrangement with the ability to present existing overlooked opportunities in a form most easily recognized and noticed by spontaneous learners" (Kirzner, p. ).
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The crucial point was discovered in 2007 by Sarah Millermaier, who argues in the
way of Jürgen Habermas that communication is after all a cooperative game (Millermaier, 2007). A real conversation, in Habermas' words, "specifies which validity claim a
speaker is raising with his utterance, how he is raising it, and for what" (1981
[1984/1987], p. 278). That is, a real conversation entails serious rhetoric. What Habermas calls "strategic" speech is on the contrary a reading through the speech to the "underlying" interests. It is speech meant to achieve a result external to the practice (to use,
as Millermaier does, the language of still another student of these matters, Alasdair
MacIntyre). Millermaier observes---and here with MacIntyre and myself---that the conversation must be ethical and the ethics must be of the virtues and therefore that what I
am calling "real conversation" must draw on the seven principle virtues (McCloskey
2007).
Think of an academic discussion, perhaps one on how the way that language
works in an economy adumbrates a humanistic science of economics going quite far beyond the prudence-only, Benthamite-Samuelsonian-Posnerian routine that economists
have been grinding on for so long. Imagine that the main speaker is not trying earnestly
to uncover the truth, say, or to learn from the audience by listening, really listening, but
instead is focused entirely on some result external to the practice of serious scientific inquiry---getting a job offer that will raise her salary at home, perhaps; or demonstrating
to the admiring audience how very intelligent she is. Imagine that the audience is similarly engaged in a non-cooperative game (the old Industrial Organization seminar held
at the Law School of University of Chicago in the 1970s was like this when certain
members were present, and others absent). Such a boys’ game may be fun to play. But
it’s not serious conversation, not science. Except in those cases in which the science is
run by boys.
If speech is merely strategic, a non-cooperative game, then the only virtue in play
is prudence. Every attempt to characterize speech by a well-trained Samuelsonian
economist is going to try to reduce it to such prudent tactics. Economics is after all the
pure theory of prudence. It is natural to the rhetoric of economics since Bentham and
especially since Samuelson to imagine that all behavior is reducible to that of the charmless, unloving, and above all calculating fellow, Max U.
Millermaier’s point is that such a reduction is corrupting of real conversation. It
makes impossible the mutual formation of meaning which much of our economic life is
about, and depends on. We engage in polite chatting around the water cooler and are
able thereby to cooperate with our colleagues. If we engage in it obviously for that purpose, though, people catch on, and we find it more difficult to gain cooperation. An
economistic way to make the point is a paper by Paul Ingram and Peter Roberts in the
American Journal of Sociology in September, 2000, "Friendship Among Competitors in the
Sydney Hotel Industry." They find that the friendships among competing hotel managers in the 40 Sydney hotels in their study generate about $2.25 million Australian more
of gross revenues per year per hotel—for example, through recommendations of the
competing hotel when fully booked—than would be generated by a hotel with friendless managers (p. 417). So far so good for Judge Posner. They add, however, "the criti-
282
cal caveat that the instrumental benefits of friendships are inextricably tied to the affective element," that is, you can't successfully fake friendship (p. 420; compare Mueller
1999, p. 39). The faithless ones get found out. Considering the depth of skill among
primates in performing and detecting falsehood, this is not surprising. Both Prudence
and Solidarity work. "Individuals who try to form and maintain friendships solely as a
means to material gain will fail to evoke trust and reciprocity." That is, prudence only
will not work, and so "those who would limit the intrusion of society into economy by .
. . characterizing embedded relationships between buyers and suppliers as predictable
outcomes of a repeated, non-cooperative game" are mistaken (Ingram and Roberts 2000,
p. 418).
That’s another reason that prices and meanings cannot be sheer, non-cooperative
games. It would be like insisting that married people only deal with each other instrumentally. As Millermaier observes, for another example, programs of corporate ethics
that declare themselves as “using” values to achieve Max U’s goals will undermine the
cooperative game that makes language and ethics possible.
The conundrum of language in the economy, then, cannot be solved within Max
U models. To the extent that language is reduced to Max U it ceases to exhibit one defining characteristic of human language, which is, I hope you believe by now, not the
mere transmission of information but the making of meaning and the imagining of novelties.
The mind, that ocean where each kind
Does straight its own resemblance find;
Yet it creates, transcending these,
Far other worlds and other seas,
Annihilating all that’s made
To a green thought in a green shade.
To put it another way, the Max U model fits smoothly with the conduit metaphor. But Max U does not fit at all with a rhetorical (or Wittgensteinian or Burkean or
Austinian or Habermasian or MacIntyrish) theory of language. If these were just silly
theories, amusing to the effete snobs in the Department of English but unworthy of the
tough, masculine science of economics, and econowannabe sciences like political science
or law and economics, then economics could go on ignoring them. But they are in fact
the best thinking about what language is that the 20th century offered. It would be unscientific to go on insisting that all we economists can talk about is our old, if unreliable,
friend, the implacably silent Max U.
*
*
*
*
Another example. Trust, of course, is one outcome of sweet talk. Economists
have devoted a good deal of attention to trust over the past decades though they have
usual tried to make it fit the Procrustean bed of a no-language, single-virtue, prudenceonly view. Even if an economic actor does not herself talk, the economist gamely
claims, she will nonetheless form opinions about the trustworthiness of others, looking
merely as a prudent person at their actions. We say, “Actions speak louder than
words.”
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But the proverb is false if taken always to be true, as economists now do. Sometimes words speak louder than actions. Borrowing and lending take place only after a
persuasive story has been told and believed. You do not lend to your brother-in-law if
you do not believe his promises to repay, or if you do not share his vision of the millions to be earned in real estate. The more so with strangers. In the absence of signals
of trustworthiness such as belonging to your own unpopular religion, say, or having a
high rating from Dun and Bradstreet, no stranger gets a loan.
A classic paper in 1963 by the legal sociologist Stewart Macaulay studied firms
that did business in Wisconsin. He confirmed what everyone in business knows, that
business normally depends on a state of trust, not on explicit contracts to be enforced in
courts. One large manufacturer of cardboard boxes looked into how many of its orders
had no agreement on exact terms and conditions that would satisfy a lawyer looking for
a "contract." The manufacturer found that in the mid 1950s the percentage ranged from
60 to 75 percent of the orders, in an industry in which an order canceled means you end
up holding a lot of useless boxes shaped and printed to the particular customer's specifications (Macaulay, 1963, p. 196).
It drove the company lawyers crazy. One said, "Often businessmen do not feel
they have `a contract'—rather they have ‘an order.’ They speak of ‘canceling the order’
rather than ‘breaching the contract’" (Macaulay, 1963, p. 197). Another lawyer declared
that he was "sick of being told, ‘We can trust old Max,’ when the problem is not one of
honesty but one of reaching an agreement that both sides understand"(Macaulay, 1963,
p. 195).
The non-lawyer businessmen didn't see it that way. "You get the other man on
the telephone and deal with the problem. You don't read legalistic contract clauses at
each other if you ever want to do business again. One doesn't run to lawyers if he
wants to stay in business because one must behave decently" (Macaulay, 1963, p. 198).
One uses the courts only when someone defects. But few defect. There's a purely prudent reason, to be sure—that defecting is bad for business. But there's a just, faithful,
loving ("good old Max") reason, too.
People want to be virtuous in business as elsewhere in their lives, and their virtues depend on relations developed through talking with good old Max. (Talking to
Max U, by contrast, is valueless cheap talk.) Macaulay concluded that "Two norms are
widely accepted. (1) Commitments are to be honored in almost all situations; one does
not welsh on a deal. (2) One ought to produce a good product and stand behind it"
(Macaulay, 1963, p. 199).
In 1912 before a House committee on the money trust J. P. Morgan was being
questioned by a hostile Samuel Untermyer:
Untermyer: Is not commercial credit based primarily upon money or property?
Morgan: No sir; the first thing is character.
Untermyer: Before money or property?
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Morgan: Before money or property or anything else. Money cannot buy it.
. . because a man I do not trust could not get money from me on all
the bonds in Christendom.
Of course. If you want to be frightfully sophisticated about people's real motives and
claim that these are not the rules of bourgeois life, that capitalists are a pack of liars and
thieves, you will need to explain why you get indignant when the rules are violated,
and why in your daily transactions you assume they will be obeyed. Breaches of contract and negligent torts are worth worrying about, but they are not the central business
of business, which is talking people into cooperation to get the job done.
Trust, of course, runs stock markets. The rumor of the Street determines the
price of stock, at any rate within limits of fundamentals---though the very fundamentals, such as imagined futures sales and returns, or the fairy dust of the Federal Reserve
Board, are themselves often sweet talk. Trust and friendship, therefore, make possible
speculative bubbles, from the tulip mania of the 1630s to the dot-com boom of the 1990s.
The very fact of capitalism's speculative instability, in other words, argues for an entirely new prevalence of belief in strangers. "Credit" is from creditus, "believed." Each of
the hundred-odd quotations in the Oxford English Dictionary illustrating the noun and
the verb date from after 1541, and most of the commercial quotations from the 16th century are suspicious of it. An act of 34-35 Henry VIII (that is, 1542) noted that “sundry
persons consume the substance obtained by credit of other men.” Shame on them.
Contrast the neutral language of Locke in 1691: credit is merely “the expectation of
money within some limited time.” A shift in talk had taken place, 1542-1691, and a shift
in the ideological support for capitalism (McCloskey, forthcoming).
A business cycle based on pyramids of credit was therefore impossible in the distrustful 16th century and before. The macro-economy could in earlier times rise and fall,
of course, but from harvest booms and busts, wars and pograms, not from credit booms
and busts. In those olden days God's hand, not human beliefs, made for aggregate ups
and downs. Medieval and early modern people trusted only allies, and had wise
doubts even concerning some of them: “How smooth and even they do bear themselves!/ As if allegiance in their bosoms sat,/ Crowned with faith and constant loyalty”
(Henry V, II, ii, lines 3ff). Pre-moderns had to keep faith with God and with their lords
temporal. Late moderns keep faith with the market and with their friends, and build
upon credit.
On this theory the episodes of disorder and unemployment in capitalism from
the 1630s in Holland, and from 1720 in Northern Europe generally, arose from the virtues of capitalism, not from its vices, from its trustworthiness, not from its greed. To be
more exact: the business cycle arose from trustworthiness breaking down suddenly in
an environment of quite normal human greed for abnormal gain, the accursed love for
gold which has characterized human beings since the Fall. What is novel in capitalism
is the faithful trust, generated by talk. Why do people ride on airplanes at great expense to have sit-downs with bankers or customers or Mafia godfathers? To generate
the trust to do business with.
*
*
*
*
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Another example. "A gap persists," writes the game theorist Judith Mehta, "between accounts of behavior framed by rational choice theory and experimental evidence
of how people actually behave in a bargaining situation" (1993, p. 85). The way people
frame the story they are in, the meaning of the story as much as the plain facts, changes
the outcome. A "bargaining situation" would be, for example, that of two people who
meet in the middle of the Sahara, one with food only, the other with water only. At
what ratios will they trade? The solutions are obviously multiple. If Ms. Jones, with her
water jug, is a canny bargainer, while Mr. Brown, the food guy, is a bit of a simpleton,
you get one solution, favorable to Jones. If the skills at talking and thinking are reversed, you get another. If Jones and Brown are Rawlsian, they share the water and the
food exactly equally, because behind a veil of ignorance as to what position they are in,
that is the best solution, supposing (as Rawls somewhat arbitrarily did) they are both
risk averse. . . and if one is not much taller than the other; if one does not have stored fat
and the other does; if they can reach reflective equilibrium; if they have somehow become before the story begins ethical actors; if they are Moslems; if they are Buddhists; if,
if, if. The two may wish to be fair. But, Mehta observes, the word "'fair' does not have
some singular, objective meaning" (p. 94). We make the meaning, through talk.
As Mehta puts it, "real individuals ascribe particular and shifting identities to
themselves and their opponents in a bargaining situation (for example, as ‘friends’ or
‘non-friends,’ or as partners in a relationship). . . . They adopt a particular set of expectations and behavioral responses contingent on the meaning they ascribe" (p. 93). These
are roles we assign in stories we tell. An example is the role---literally, the theoretical,
fairy-tale role---played by the chairman of the Federal Reserve Board in "setting" the interest rate. There is no evidence that Ben Bernanke actually "sets" the world interest
rate. The notion that he does so is impossible, though a wildly popular tale, considering
the bit of information that the portfolio he has influence over is a tiny portion of the
loanable funds available in the world's capital markets. But the exchanges dance, at
least in the short run, to Ben’s tune, because of the heroic story that people tell about the
meetings of the Fed open market committee.
*
*
*
*
One can go on like this. The best tactic, though, is to go back to the rhetoric of
economics itself, looking hard at the metaphors economists use and noting the language
games supposed in them. Take consumption. Imagining having ice cream to consume
entails a language of thought (a point that the philosopher Jerry Fodor makes); that is,
choice entails a language, an internal debate (as Aristotle pointed out), even a rhetoric.
This is true of animals, and certainly of Crusoe on his island alone. He said so. The
human ability to imagine is merely a more extreme form of choice-making common to
all living things. But it is extreme. A bird imagines (we suppose) a nest of a speciesparticular kind. But only language-using humans, so far as we can gather from watching whales and elephants and chimps a little, can imagine a thousand different forms of
Crusoe's cave and compound, those other worlds and other seas.
The very choice of technique, the tough-minded consideration of “production
functions,” involves language. How things are made with recipes will entail talk.
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"Take two eggs. . . ." The books of recipes that Paul Samuelson characterized as "the
production function" are informational, and this is as far as economics gets in thinking
about them. It’s the conduit metaphor again communication as bits of information. But
books of recipes are persuasive, too. "Hmm: that looks good." A chemical engineer
must be persuaded that this or that technique he has heard of does in fact work as advertised, and indeed trade magazines directed at him are quite elaborate exercises in
persuasions-for-a-sophisticated-audience, sweet talk of a professional sort. Look for example at the Journal of the American Medical Association, its articles, its editorials, its ads.
Likewise working. The metaphor of a production function must always involve
getting people to do the job---take the eggs, adopt the technique, arrive on time. Organizing other humans obviously involves language, about which popular books about management obsess. About a third of the business books on the airport rack are devoted to
rhetoric. Count it the next time you’re in an airport. Management, I noted, is the great
realm of sweet talk in a free society---not so in a society of status and instant obedience
backed by swords. And not so in a society of utter routine, the steady state, Groundhog
Day, even if the workers are otherwise free. If every question of what to do is already
answered, then people just do it, without the persuasive, "John, we want you to go on
the road next month to consult with our big client in Milwaukee. It's an important assignment."
The management need not be suited and tied. Any human cooperation in a task
requires language, at any rate for a new, non-routine task. A master electrician needs
language to tell his journeyman to push the wire further behind the wall. The catcher
signals the next pitch, the pitcher shakes off the sign, the catcher tries another. They are
speaking, and persuading.
Social clotting can stop persuasion, well short of any purely syntactic inability to
express this or that. If a worker resents every order, unwilling to imagine himself a
member of a sacred Team or unwilling to try to see the economic point of the order
(perhaps because he does not give a hoot whether the customer is well served, or
whether the Team wins), then cooperation breaks down. A society in which low status
people---women, blacks, untouchables, young people---are not listened to by high status people will forego a gain from cooperation. The point is similar to one defense of
classic democratic theory, namely, that the more opinions that are expressed the better
can the society choose the best ones. A mechanical form of the argument appears in the
voting schemes of Condorcet. A less mechanical version is the advocacy of free speech
by John Stuart Mill, and Lord Bryce's phrase, adopted enthusiastically by the economist
Frank Knight, "government by discussion." The economist Scott Page has brilliantly
discussed diversity in such terms (Page 2007). The question is how big the loss is from
government by politburo as against government by discussion. The experiments in the
20th century with communism suggests that the loss is big, in treasure and in spirit.
*
*
*
*
One more consequence of a linguistic economics would be the admission of ethics. Prudence is a virtue, I have noted, but it is not the only virtue. One can make a case
that the virtues are seven: prudence, temperance, justice, courage, love, hope, and faith
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(McCloskey, 2006). George Akerlof has recently argued that macroeconomics depends
on norms and motivations more complex than buy low/sell high---that an economics
that thinks of people as normless and prudence-only will get the course of prices, incomes, unemployment wrong. He concludes that a more scientific economics than the
one we now have “would observe decision makers as closely as possible, with the express intent of characterizing their motivation, and would use such characterization as
the basis for modeling economic structures” (Akerlof, 2007, p. 56).
An economics that does not examine meanings expressed in words will have a
hard time doing Akerlof’s “observing” and “characterizing.” Ostrom et al. note that
their experiments do not distinguish exactly which ethical imperative is added to prudence only, only that some additional norm must be working as well, since their subjects
do not act as a prudence-only Max U-er would. "When an [anonymous] defector is
called a 'scumbucket,' is the reproach being used because someone is breaking a promise, is being uncooperative, or is taking advantage of others who are keeping a promise?" That is, is the scumbucket seen as bad because he is unfaithful to an identity of
promise-keeping, or because he is unloving, or because he is unjust?
But whatever exactly the sin, the experiments by Ostrom et al. and dozens of
other recent experimenters, quite aside from the testimony of law and literature since
the invention of writing, show that people don't like to be sinful and selfish. To put
their point in Ostrom et al.’s own, game theoretic terms, ethical considerations beyond
prudence only in effect "trim the branches of the decision tree" that violate justice or
love, say. The experimental findings, and the evidence "from the field," overwhelmingly attest to such trimming.
Yes, I can get away with stealing a book from Sandmeyer's Bookstore next to my
building in Chicago. After all, the owner trusts me, and often turns his back. But I
wouldn't think of it. Stealing from him would outrage my sense of myself, my impartial spectator. I do not always "trim" even the monetarially unprofitable branches. If
Sandmeyer's charges a dollar more for a book than does Barnes and Noble I nonetheless
gladly buy it at Sandmeyer's, to support an independent bookstore against a goliath, to
honor my commitment to a civilized neighborhood, to express my love for the owners.
People do. It's cool to be cynical about human motivations, remarking sagely that one
should follow the money. Take it easy, we say in Chicago, but take it. Cool though
such analyses may be, they are nothing like a full account of human behavior.
*
*
*
*
My love for economics is not I hope in question. I've practiced since 1964 its core
disciplines, "price theory" Chicago-style (if not always with Chicago politics) and its
characteristic fascination with numbers (if seldom in the bankrupt style of statistical
"significance"). I've been a transportation economist and a quantitative economic historian. But I want to go a lot further, for the good of the order. Adam Smith was a professor of moral philosophy, not a student of prudence only. Economics since him, in
Marxism and in Samuelsonianism, has become the exclusive study of Max U, that unattractive character---indeed, literally an inhuman, sociopathic fellow, who never stoops
to exercise voice. He is a character whom Jeremy Bentham invented, Karl Marx politi288
cized, Paul Samuelson mathematized, Gary Becker applied to everything, and Richard
Posner adduces to get that nonsense-upon-still “justice” out of jurisprudence. I want
economics to stop obsessing about Max U and become "humanistic" in a particular, academic sense. I want it to take seriously, as old Adam did, "the humanities," and become
what the French revealingly call a “science humaine."
What this would mean is that we economists would deal with fully human characters---real ones like Madame Bovary and Jesus of Nazareth. It would mean that we
would acknowledge in our models (realizing at last that a "model" is not always just the
same thing as "a Max U formulation") all the human virtues: prudence, yes, but also justice, temperance, courage, faith, hope, and love. And the corresponding vices, alas.
A good first step is to take seriously the economics of language, right? Am I persuasive?
Let’s have a conversation about it, a real one.
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A very miscellaneous chapter, not formed:
Chapter 30:
The Bourgeoisie Enacts Speech
The syllogism: Capitalism is cooperation, not mainly competition.
After all, mercantilist republics and ancient empires competed economically with each other, often to war and conquest. (Athenian
ideas of empire in Thucyd.) These are zero sum. But what is notable about capitalism is that it is positive sum. Cooperation depends
on sweet talk, not coercion. Therefore, the amount of sweet talk is
an index of cooperation. Thus Smith to Hayek. The creativity of
talk: find deals (minor part), find new ideas together, and habits of
such talk carries over to individual thinking, dialogic and nonauthoritarian.
Arjo Klamer's way of looking, independently discovered by Fiske, and Arendt,
and numerous others:
Logic of Exchange
Logic of the state
"Not" chps.
Nationalism, planning
Logic of the social:
Logic of Connection (love)
The family, religion
Each sphere has its institutions. The market has the floor of the Chicago Board of
Trade, with its hand-signals and commotion. The state has its bureaucracies in serried
rows. Joke: Dept of Agric. The family has its traditions of the two-week camping trip to
the north woods, or Sinterklas. The social has its institutionalized rules of easy conversing among strangers.
Each sphere has, in other words, as the rhetoricians put it, "special topics," that is,
certain ways of talking, certain scripts that would sound strange if applied to another
sphere. If a family follows strictly the rules of easy conversing among strangers, and
never gets down to cases, we worry, seeing it as a tragedy or a joke. If a bureaucracy
uses the language of the market, we are startled—NNN as telephone operator in the
days of AT&T's monopoly saying to an angry customer, "If you don't like our service,
go to our competitor." If a club member in the realm of the social demand a special
quid pro quo for taking his painful turn on the governing board, we are annoyed.
But the places in common—literally, the commonplaces, the loci communes, the
koinoi topoi—are linguistic. The lone institution that all four spheres share is language.
All we have in common is language, not our separate tongues after Babel but the faculty
290
of speech. Language is an institution. In fact, all other institutions are analogies to language, when they are not violent. Sharing language means sharing metaphors and stories. The effective constraint on human behavior is not grammatical. Prove this. It is
"pragmatic," in the technical sense used in linguistics.
So, the metaphor of GOVERNMENT IS A FAMILY brings notions of caring into
politics. The "family" of the United States of America, admittedly, contains 300 millions
souls instead of two or six or a dozen. But nonetheless (the metaphor asserts) we
should treat other Americans as family: being family means you have to take him in.
You can celebrate or criticize the metaphor, but the point here is that family-talk spills
over into government-talk. In a rhetoric common in 1593 in England, THE KING IS A
FATHER dominated political discourse. Thus the Anglican divine Richard Hooker
wrote, "To fathers within their private families Nature hath given a supreme power."
But then he sharply criticizes the metaphor, on ground similar to the criticism of a 300million person family.
Over a whole grand multitude [such as 300 million souls] having
no such dependency upon any one [in as much as it does not have
a single natural father]. . . impossible is it that any should have
complete lawful power, but by consent of men, or immediate appointment of God; because not having the natural superiority of fathers,
their power must needs be either usurped . . . or, if lawful, then either . . . consented unto by them. . . or else given extraordinarily
from God.
Hooker 1593, p. 191, italics supplied.
The phrase "by consent of men, or immediate appointment of God" states the gist of the
political struggle to come in 17th-century England, and later elsewhere. Are kings by
God anointed, or do they derive their just powers from the consent of the governed?
So likewise the story of expertise in government . . . . spills into the market. Obsession with Bernanke and Omaha guy. "Someone must be an expert," which the economist denies. Jerry Nordquist story.
The spillage of special topics into the common places has consequences. If you
really do think and speak of the Pope as "the Holy Father," you are less likely to protest
at innovations sponsored by him such as clerical celibacy [DATE] or papal infallibility
[DATE]. Father knows best. To be sure, your position as a nun may lead you to use
the father metaphor. The position, not the language, may be the common cause of the
figure of speech and of attitudes towards action. A federal judge is required by her position to speak to the court in a certain way, regardless of her interior convictions about
the law. But metaphors constrain thought, too, independent of your pleasure in the
matter. If every other nun around you uses the Holy Father talk, you will come to see
him that way. If you think and speak of the Pope instead as merely a highly successful
clerical politician, then all your disdain or admiration for politicians spills into your actions in ecclesiastical polity. Like some nuns of my acquaintance, you will for example
work against church policy in the position of women, the political rights of the poor, the
. . . .example of story spilling badly from one to another.
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In 18th century Scotland, John Dwyer and Joan Tronto have argued, the perception of increasing social distance worried the philosophers. That the “breakdown of
community” fit with ancient traditions of the pastoral made it easier to believe. The increasing anonymity of a commercial society was supposed to erode solidarity. People
have been saying this ever since it is the heart of both the Durkheimian and the Weberian analysis of European life c. 1900. Long-distance trade grew in the 18th century and
then exploded in the 19th of this there is no doubt. But did the long-distance trade make
people less connected? Did social distance actually increase with the spread of commerce?
Recent analogies suggests where the notion of increasing social distance might
go wrong. When e-mail on the worldwide web first got into its stride we all talked
about the increasing social distance it would bring. The press was filled with confident
predictions that e-mail would break solidarity. One can still find such Chicken-Little
talk about the end of community by electronic death, though less and less as the evidence accumulates. People would sit in their lonely rooms, we said, “talking” to imagined characters, neglecting the forum of civic republicanism. The social world would
dissolve into a science-fiction nightmare. No one would show up for coffee.
What actually happened, of course, is that e-mail widened rather than narrowed
social contacts, and deepened rather than drained the content of friendship. People had
more to talk about. The bulletin board on the sport of cricket has over 500 messages a
day, with enthusiasts from Boston to Bangalore chatting, denouncing, informing, quarreling, joking, viewing with alarm in other words, being human (and mainly in this case
male). Letters to the editor, with month-long delays in the magazines, are a poor substitute when a man wants urgently to complain about body-line bowling in the latest test
series though the round-robin letter such as the Beecher family (Harriet Beecher
Stowe’s, that is) used to circulate sound like a mid-19th-century version of e-mail.
Likewise television. The baby boomers, especially the elder-boomers born in the
1940s who grew up before Leave It to Beaver, view the TV-saturated socializing of their
generation X children with horror: “Come on kids, go down to the local soda fountain
and really get to know each other.” The elder-boomers see their children’s fixation on
TV as similar to the giant screens in every house described by Ray Bradbury in Fahrenheit 451 (1953), enticing the population into soap operas crowding out real lives.
But that’s not what happens. The TV culture is used by the kids for the same social purposes as shopping in the local marketplace or gossiping at the well or hanging
out at the soda fountain was used by earlier generations. Generations X-ers and their
younger siblings the Slackers live and love with the TV blaring, make jokes at the expense of the advertisers, use the medium. People do. The medium is the message, to
be sure, but people are not therefore passive in its grip. (Notice that it’s always other
people who are passively in the grip of rhetors. We intellectuals know.) Seventy years
of communist propaganda in Russia damaged Russians, but not in the way the commissars had hoped. In Poland forty years of the same message left hardly a scratch on the
Polish mind.
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The scandalized old folks resemble the monks writing about Irish women in the
middle ages, as XXX describes it. Real social life, said the monks indignantly, is something that happens in courts and battlefields among men. This womanly gossip while
washing at the river or selling at the fair undermines male authority, and is the Devil’s
forum. Keep the women at home, isolated from other women, lest they conspire
against us. So too say the parents of e-mailers.
It’s easy to believe, surely, that getting out of the family and village into a world
of ocean-crossing ships, then telegraphs, then telephone, then airplanes, then e-mail was
in fact liberating. It has been long established that in England at any rate the vision of
villagers as confined to one place is wrong, as early as we can know [McFarlane]. English people were in 1300 always already “individualists,” mobile from place to place
[Raftis]. The issue is, was individualism alienating? Did it produce anomie? That is,
did people lose connection a society of love in accepting autonomy a society of courage?
The speaking ability is quantitatively important in various bourgeois societies.
Commerce contains every sort of dealing in the purchase, sale, and exchange of domestic or foreign goods. This art is beyond all doubt a peculiar sort of rhetoric—strictly of its own kind—for eloquence is in the highest degree necessary to it. Thus the man who excels others in fluency of
speech is called a Mercurius, or Mercury, as being a mercatorum kirrius (=
kyrios)—a very lord among merchants
“Commerce” (thus half of the chapter),
Hugh of St. Victor (c. 1078-1141),
Didascalicon de Studio Legendi,
book 2, chapter 23 (trans. Jerome Taylor)
In some cases oratory and action are one. An offer to buy hamburger at $3.00 a
pound is a “speech act” in the sense linguists and philosophers use the phrase, namely
in that it produces results in the very act of speaking.497 Saying “I thee wed” is a mere
form of words, which children can use in make-believe. But in the right circumstances
the form of words does a deed. So does saying “I offer $3.00,” when followed by the
reply, “Sold.” An unusually high price for beef “says” that more cattle should be
raised. The eaters of beef converse with ranchers, telling them of their great hunger for
steaks and hamburgers, backed by willingness to pay. The ranchers reply, “We shall be
glad to give you more, but you must understand that we have expenses, too.” It is a
passing of information.
But there is more to speech acts than passing information. An economist can understand a conversation as a game, in the technical sense. In Austin’s vocabulary, one
must distinguish in such a game between the mere locution (“Let’s make a deal to fix
prices” viewed merely linguistically) and the accompanying “illocution,” which is to
say, the skillful social act that intends to persuade, say, some other oligopolists to form
a monopoly. Illocutions are about intended persuasion. That is, they intend to change
other people’s behavior or speech. An incompetent rhetor will say “I thee wed” on his
497
cf. Austin 1955 [1965], Searle 1969; Petrey 1990.
293
first date or “Let’s make a deal” in the presence of lawyers from the Antitrust Division
of the Department of Justice. Game theoretically speaking the illocutions are the moves
of Mr. Column. The moves of Mr. Row are those of the audience for the illocutions.
What the audience then does in response is called by Austin a “perlocution” (primary
accent on the “per”). A linguist would want to go back to the locutions; an economist
would like to rush on to the perlocutions. But, as Sandy Petrey explains, the key to
bringing language and the economy together is to stick with the middle term, the illocutions, those skillful or clumsy, felicitous or infelicitous acts of sweet persuasion that take
up one quarter of national income.498
Look for example at the vexed theory of the entrepreneur. As Metin Cosgel and
Arjo Klamer have argued, the entrepreneur is above all a persuader, in the classical
word a “rhetor,” exercising the characteristic faculty of human nature for pay.499 Take
the egregious Donald Trump . . . please. Trump offends. But for all the jealous anger he
has provoked he is not a thief. He did not get his billions from aristocratic cattle raids,
acclaimed in bardic glory. He did not use a broadsword or a tommy gun to get people
to agree. He made, as he puts it, deals, described from his point of view in his book,
Trump: The Art of the Deal. He bought the Commodore Hotel in New York low and sold
it high. Penn Central, Hyatt Hotels, and the New York Board of Estimates valued the
old hotel low; the customers valued the new place, suitably trumped up, high. Trump
earned his entrepreneurial profit for noticing that a hotel in a low-valued use could be
moved into a high-valued use. An omniscient central planner would have ordered exactly the same reallocation.
Crucially, Trump had the power of persuasion to close the deals, the art of felicitous speech acts. As he puts it, “you have to convince the other guy it’s in his interest to
make the deal.”500 Persuasion was the main way he transformed the Commodore Hotel
into the Grand Hotel: “First, I had to keep [the owners of the hotel] believing [such and
such]. . . . At the same time, I had to convince an experienced hotel operator to [do so
and so). . . . I also had to persuade city officials [thus and such] . . . . That [persuasion] .
. . would make it far easier to prove to the banks that [so and such].”501
Though featured on the front page of the business section daily, the point is ancient. A Sanskrit poet complained of the skilled persuader, as people do: “I have not
skill to place my lips / upon another’s ear / nor can deceive a master’s heart / by inventing false adventures. / Too stupid as I to have learned / to speak words false but
sweet; / what have I then to recommend me / to be a rich man’s friend?”502 Thomas
Buddenbrooks did deals. His partner, Herr Marcus, the former confidential clerk, a
hired manager, “was incapable of that sort of thing.”503 Shih-Yen Wu has pointed out
that the entrepreneur is precisely the unhired, unroutine character in the story of capi498
499
500
501
502
503
Petrey 1990, p. 17.
Cosgel and Klamer 1990.
Trump 1987, p. 53.
Trump 1987, p. 122.
Ingalls 1965, Number 1470.
Mann p. 210.
294
talism, the last and never to enter the market. The very meaning of the entrepreneur, he
argues, is his unmarketed residuality.504 What then is in the residual? The Austrian
economist Israel Kirzner, I noted, has argued that entrepreneurial profits are a reward
for “alertness.” Calculative rationality, however, cannot make much of entrepreneurs.505
Technological change can be viewed from this perspective. The systematic
search for inventions can be expected in the end to earn only as much as its cost. It is
hard work, merely. The routine inventor is an honest workman, but is worthy therefore
only of his hireand ceases in Wu’s terms to be an entrepreneur at all. The costs of routine improvements in the steam engine of 1800 ate up the profit. They had better have,
or else the improvements were not routine. Routine improvements are not free lunches.
As the economic historian Joel Mokyr put it, “The cold and calculating minds of Research-and-Development engineers in white lab coats worn over three-piece suits” created some of the improvements.506 But only some.
Nor, on the other hand, is it reasonable to hand technological history over to
mere chance, the other end of Kirzner’s spectrum. Mokyr shows this from the records
of invention. What was required was something between dull effort and heedless luck,
namely, a bird-like alertness, ready to get the worm. The alertness explains why entrepreneurs are worthy of their hire.
But the Trump story suggests that something is missing in the metaphor of
“alertness,” needed to complete the theory. From an economic point of view, alertness
by itself is academic, in both the good and the bad sense. It is both intellectual and ineffectual, the occupation of the spectator, as Addison put it, who is “very well versed in
the theory of a husband or a father, and can discern the errors of the economy, business,
and diversion of others better than those engaged in them.”
If his observation is to be effectual, however, the spectator has to persuade a
banker. Even if he is himself the banker he has to persuade himself, in the councils of
his own mind. What is missing, then, from the Austrian theory of entrepreneurship
and technological change is persuasion. Between the conception and the creation, between the invention and the innovation, falls the shadow. Power runs between the two,
and power is evoked with persuasive words. An idea without the persuasive words is
just an idea. “A man may know the remedy, / But if he has not money, what’s the use?
/ He is like one sitting without a goad / on the head of must [lust intoxicated] elephant.”507 This is as true of literary or scientific opportunity as it is of technological invention. Until he won the Goncourt Prize in 1919, Proust was not much considered.
The Prize persuaded the French public to take him seriously. Until Saul Bellow put his
imprimatur on William Kennedy's books (Ironweed and other Albany novels), Kennedy
worked unknown as a reporter on the local newspaper. Intellectual bankers need to be
persuaded as much as financial ones. The same is true of science. Scientists pursue cer504
505
506
507
Wu 1989.
cf. Madison 1990, p. 56 n25; cf. Mäki 1990; Wu 1989.
1990, p.
Ingalls 1965, Number 1681.
295
tification as much as they pursue knowledge, because knowledge without persuasion of
an audience is useless, the curse of Cassandra, to know all but to be able to persuade
nobody.
What makes alertness work, and gets it power, then, is persuasion. At the root of
technological progress is a rhetorical environment that makes it possible for inventors
to be heard. Or as Lawrence Berger has argued, the “attention” of the entrepreneurs
may be alerted.508 The environment of persuasion or attention affected technological
change, especially the great technological changes. The Industrial Revolution, one
might venture as a hypothesis to be examined, was rhetorical (as Wu 1989 has argued,
too). The division of labor, in short, is limited by the extent of the talk. The more specialized is the economy, the more divided is the airplane into special makers or the distribution of meat into special merchants, the more talk is necessary to establish trust
among the cooperators. Trust is part of an economics of talk.
The observation that small communities talk to each other more easily than do
large communities is of course a sociological cliché. Knowledge of a bad deal will fill a
small town but is lost in the din of a metropolis. Plato said in the Laws (V, 737e) that
the optimal city state had 5040 citizens, on the strange grounds that this number is
evenly divisible by every number from 1 to 10, the better to form exactly equal-sized
groups for political or military purposes. Aristotle on characteristically more sensible
grounds said that “the citizens of a state must know one another’s characters” (Politics
VII. iv, 13). The extreme case of a small town is a two-person society, in which Robinson Crusoe knows every defection by Friday, and vice versa. Furthermore, in this case
Crusoe and Friday do all their business with each other. In a world of strangers, by
contrast, a new sucker arrives every minute. It is good business to establish friendships
with your suppliers and customers and even with your competitors (who may be employing you next year). The dealings of strangers are subject to defection from social
norms. In a world of Hobbesian asocial monads the next stranger you meet would just
as soon shoot you as shake your hand (Field). That is why the airlines are crowded
with business travelers, on their way to making friends.
The economic point of friendship and other supergames is to establish rules of
interpretation that cannot be broken cheaply. The literary critic Wayne Booth speaks of
“stable irony,” which is to say irony in such a context that it can be reliably interpreted.
A similar point was made by the philosopher Grice, noting “conversational implicatures,” the rules by which a conversation lives. One “maxim of conversation,” we have
seen, is “the maxim of Quality,” that is, to state only what you believe to be true. A
conversation of liars would end in paradox.
What is economically suggestive about the linguistic idea is that such maxims are
implicated by the very act of conversation. Grice argues that they are not conventional,
in the sense that different cultures could have different maxims, but are implied by the
setting of any talk. In other words, they are dominant strategies of talk (Green 1989, p.
96 makes a good case that the anthropological evidence supports Grice). False, per508
Berger 1990.
296
verse, prolix, laconic, irrelevant, disordered, obscure talk does not serve the purposes of
straight talk. As soon as it is recognized as aberrant it will be broken off, or else reinterpreted as crooked talk to some purpose. If a banker says falsely “Business is fine” in
circumstances such as a bank examiner’s visit in which he is expected to be candid he
will continue the conversation in jail. On the other hand, the examiner, seeing the
books are $1,000,000 short, and knowing that the banker knows he knows, may take the
remark as proper irony about the malfeasance of a former vice president, now a resident of Brazil.
And it is obvious, to give another example of the saliency of talk, that cooperation inside the firm depends on speech. Persuasion through speech is necessary for
teamwork, from a coxswain pounding out the strokes per minute to Colonel Joshua L.
Chamberlain (a professor of rhetoric in civilian life) persuading the 20th Maine to make
a bayonet charge down Little Round Top at the Battle of Gettysburg. David Lodge’s
novel, Nice Work, shows an English professor, Robyn Penrose, realizing that the businessman she was assigned to watch was first a persuader:
[I]t did strike [her] that Vic Wilcox stood to his subordinates in the relation of teacher to pupils. . . . [S]he could see that he was trying to teach
the other men, to coax and persuade them to look at the factory’s operations in a new way. He would have been surprised to be told it, but he
used the Socratic method: he prompted the other directors and middle
managers and even the foremen to identify the problems themselves and
to reach by their own reasoning the solutions he had himself already determined upon. It was so deftly done that she had sometimes to temper
her admiration by reminding herself that it was all directed by the profitmotive.
Lodge 1988 (1990), p. 219.
The point is this: the Prudence-only search for a selfish models of efficiency wages,
agency costs, insider-outsider deals, and the like will be half successful. Motivating
people by deals will work only if the deals convey to them the right story of their own
lives. The earning of profit, for example, can be justified on moral and on utilitarian
grounds. But it can also be justified as something we bourgeois Westerners (or Easterners) do, a practice of ours, a habit that makes us what we are. The score-keeping in
business is otherwise hard to understand. People rich beyond the dreams of avarice
continue to play a game of entrepreneurship.
*
*
*
*
And so it is unsurprising to find experts in talk as theorists of bourgeois virtues
virtue in the 19th century. The experts were common-law lawyers. The Man of Contracts and Torts, the “reasonable man,” imagined most systematically in the 19th century
was the ideal bourgeois character. Is in fact of contract law a bourgeois as against aristocratic or peasant character? Perhaps the common law has always been a stalking
horse for bourgeois virtues.
297
Patrick Atiyah outlines the mid-19th-century contract law, “suited to the free
market,” in terms that are on every point hostile to aristocratic or peasant/proletarian
values). The parties deal with each other “at arm’s length. . . . Neither owes any fiduciary obligation to another,” which is to say that only equals unbound by loyalty, not
master and man in a feudal society, could make a contract. “Neither party owes an duty to the other until a deal is struck.” No solidarity in an imagined village or neighborhood intervenes. “[N]either party is . . . entitled to rely on the other except within the
narrowest possible limits.” These are independent actors. “Only abnormal pressures,
wholly exceptional pressures, which can be said to affect a party’s free consent or free
will . . . [can] relieve him of his obligations.” A man of the market in bound by his
word, but a word given in contract, not assumed in status. “Finally, this bindingness is
. . . a matter of pecuniary calculation. . . . [H]e must therefore perform, or pay damages.”
He who lives by the coin dies by the coin.509
Now of course this is not a portrait of actual bourgeois societies. Contract theory
was abstractions the way classical economics was, and in the same spirit: prudence only
mattered. Real bourgeois societies cannot function with skeletal rules based on the notion that no one cares for anyone else for one thing, no bourgeois child would survive
childhood under such a dispensation (see David Copperfield, Oliver Twist, Hard Times,
and indeed every novel by Dickens ).
As Lawrence Friedman (quoted with approval in Atiyah) expressed the situation
in America: “’Pure‘ contract is blind to details of subject matter and person. . . . In the
law of contract it does not matter if either party is a woman, a man, an ArmenianAmerican, a corporation . . . . [A]s soon as it does matter—if the party is a minor, or if . .
. a small auto company sells out to General Motors . . .—we are no longer talking pure
contract.”510 Thus before the 19th century a common carrier (a taxicab, say) or an hotelier was bound by who he was, not by a presumed contract. During the 19th century,
Atiyah explains, the English courts (as in Boorman v. Brown 1844 and especially Morgan
v. Ravey 1861) “blurred the line, drawn by [David] Hume a century before, between two
parties doing an act in agreement with each other [as a serf would with respect to his
lord], and their making an agreement.”511 If you step into a cab you and the driver, the
courts held, are entering into a sort of contract. You are not lord and serf but free people bargaining.
The Great Conversion against such economistic reasoning took place after 1870
in the law of contract as elsewhere in bourgeois societies. Atiyah notes that relations
between citizens and a vastly larger state will naturally follow not contract law but administrative law with such leading principles as that a state is reckoned an idiot at law,
509
510
511
Patrick S. Atiyah, The Rise and Fall of Freedom of Contract Oxford, 1979, pp. 400,
and esp. 403.
Lawrence Friedman, Contract law in America XXXX, NNNNN, p. 20 [CHECK
AND READ]
Atiyah 1979, p. 416-417.
298
unable to bind itself by its promises.512 Tort law, growing as Lawrence Friedman notes
with the railway, was at first chiefly concerned to protect corporations, and therefore
economic growth, though it, too, fell under the Great Conversion late in the 19th century.513 Tort law is of course about victims, and does not therefore comport well with the
bourgeois notion that we are all free, independent, contract-making, and unattached
men. The point of tort is that we are all pieces of the continent, part of the main, most
particularly in an industrial society.
512
513
Atiyah 1979, pp. 717, 725-26; and the inability to enforce binding promises, p.
721; the analogy with idiots in contract law is not Atiyah’s way of putting it.
Friedman, A History of American Law, 2nd ed. Simon and Schuster, 1985, pp.
468, 475..
299
Another miscellaneous chapter, mere notes. I intend to use Ibsen’s vision
of an idealism of ordinary life.
Chapter 31:
Bourgeois Virtue is an Idealism of Ordinary Life
Said Machiavelli, “it is easy to understand the affection people have for living in
liberty, for experience shows that no cities have ever grown in power or wealth except
those that have been established as free states.”514 The Episcopal Bishop of Massachusetts, William Lawrence, asked in 1901 whether the rise of income in the previous decade “favorable or unfavorable to the morality of the people.”515 He answered, yes, on
the whole. The rich man is led to “the privilege of grateful service.” And the poor “discovers one bond which is essential to the social unity in this commercial age—the bond
of faith in other men. . . . And when a man has reached this point, he has indeed
reached one of the high plateaus of character: from this rise the higher mountain of
Christian grace, but here he is on the standing-ground of the higher civilization.”516
Those two summarize it: power and wealth depends on the virtues of a free state; and
rising income can---not always---lead to virtue.
Capitalism made people free, for one thing by spreading ownership, as Jefferson
and others argued (but this is the lesser reason, for it also corrupts, as in Jefferson’s
ownership of slaves, for example, or as in the selfishness of manufacturers for their own
interests, as Smith noted). The greater reason is the substitution of contract for status,
and the spread of radical egalitarianism of a Protestant sort.
M
514
Machiavelli, Discourses on the First Ten Books of Livy (1513-17),Trans. Q. Skinner 1990b, p. 301.
p. 69.
516 p. 72.
515
300
301
Rewrite when the book is finished drafting: come back at end. It’s about the
right size now, 4800 words. Maybe smaller?
Chapter 32: How One Might See
the Coming of a Bourgeois Rhetoric as Good
Two things happened 1600-1848, and the more so 1848-the present. For one
thing, the material methods of production were transformed. For another, the social
position of the bourgeoisie was raised. (What would Shakespeare find bizarre had he
returned to London in 1760 on the ascension of George III or 1848 or 1910 or 2010? The
list in rough chronological order: BV, nationalism (tho this early, and after all he articulated it: “This realm”), technology, religious toleration, free speech, scientific revolution,
limited monarchy, population growth, income growth (< technology), British empire,
votes for B (1832) and P (1867), rights for women).
The two were connected, as mutual cause an effect. If the social position of the
bourgeoisie had not been raised, aristocrats and their governments would have crushed
innovation, by regulation or by tax, as they had always done. And the bourgeois gentilhomme himself would not have turned inventor. If the material methods of production
had not therefore been transformed, the social position of the bourgeoisie would not
have continued to rise. Without honor to the bourgeoisie, no modern economic growth.
(This last is in essence Milton Friedman's Thesis). Without modern economic growth,
no honor to the bourgeoisie. (This last is in essence Benjamin Friedman's Thesis.) The
two Friedmans capture the essence of freed men, and women and slaves and queers
and colonial people and all the others freed by the development of bourgeois virtues.
The causes were freedom, the scientific revolution (not of course in its direct technological effects, which were postponed largely until the 20th century), and bourgeois virtue.
What we can show is that the usual suspects do not work. Material causes do not work.
And so we must recur—as other economic historians like Mokyr are recurring—to spiritual causes. The only alternative is the Feinstein Hypothesis, a conjuncture of material
causes that came together like Hardy's Hap ("twain"). The word “spiritual” is a worry
in English. It would be better to use the German, Geist, which has not such sell of incense about it.
An earlier book, The Bourgeois Virtues: Ethics for an Age of Capitalism (2006), argued that a businessperson can be ethical without abandoning her business. The seven
primary virtues of any human life—prudence, temperance, justice, courage, faith, hope,
and love—also run a business life. Businesspeople are people, too. "Bourgeois virtues"
is therefore not a contradiction in terms. On the contrary, capitalism works badly without the virtues. And the virtues can be nourished in a market, and often have been.
The peasant of olden times in Europe emphasized love among the virtues. She
admired most the medieval saint. By contrast, her lord and master, the aristocrat, em-
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phasized courage, admiring the Homeric or knightly hero. And nowadays the bourgeoisie worldwide emphasizes prudence. We are all nowadays bourgeois, though exactly whom we admire—Ben Franklin or Bill Gates, Jane Austen or Ayn Rand—has not
been entirely worked out. We keep being drawn back in our stories and our philosophies into a Christian or an aristocratic ethic, or into the corresponding pre-bourgeois
ethic in other societies, such as merchant-despising Confucianism or heroic tales from
the Mahabharata. In Europe the old Christian or aristocratic stories, the Sermon on the
Mount or the wrath of Achilles, good as they are for elevating the virtues of love or
courage, interfere with the bourgeois stories we might properly be telling about the
seven virtues in a commercial society.
"Elevating" one virtue among the seven is the problem. A fully human life in a
castle, nunnery, or marketplace can't flourish with one virtue alone. In fact, one Christian definition of sin is the exercise of a single virtue without corresponding balance of
the others, justice without mercy, faith with out hope. A hero who only ventures courageously, without justice or temperance, will damage himself and his companions. Witness your reckless uncle. A saint who only intervenes lovingly, without courage or
prudence, will damage herself and her loved ones. Witness your absorbing aunt. And
so likewise a businessperson who deals in the marketplace prudently, yes, but without
justice, temperance, courage, faith, hope, and love, damages herself and her fellows. A
false bourgeois ethic of prudence only, "Greed Is Good," such as modern economics
came to recommend in the late 20th century, doesn't work.
The sociologist Peter Berger argues that globalization makes people aware of alternatives, perforce. A globalization going on in Europe since the 15th century challenged the old "taken-for-grantedness" of, say, a Catholic farmer in a 16th-century Swiss
village, who never once in his life encountered a Protestant or a Jew. Some people in
reaction, Berger observes, try to form closed communities of belief, despite the ocean of
pluralism around them. We are Amish, they say. Leave us alone. We are fundamentalist Southern Baptists. Shut up. Or—my point here—we are Wall-Street-Journal-reading
conservatives or New-York-Times-reading liberals, forming separate and strictly closed
communities of belief. We won't read that. You can't tell us that capitalism is anything
but greed, for good (says The Wall Street Journal) or ill (says The New York Times).
The better response, Berger argues, is the engaged toleration—not indifference,
but conversation—that he sees in parts of Indonesian Islam or in parts of American
Christianity. Likewise, I say, for politics and economics. The modern, secular clerisy,
left or right, in other words, should try listening. If it does, it will hear that religion is
not dead (Berger's point), that faith and hope always need dignified expression in human lives, that capitalism is not in true fact or in sensible theory a system of greed.
So the first book.
The present book asks how an explicitly bourgeois ideology emerged 1600-1848
from a highly aristocratic and Christian Europe, a Europe entirely hostile—as some of
our clerisy, I note, still are—to the very idea of bourgeois virtues. In 1946 the great student of capitalism, Joseph Schumpeter, declared that "a society is called capitalist if it
entrusts its economic process to the guidance of the private businessman" (Encyc. Brit.
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1946). It's the best short definition of that essentially contested concept, "capitalism."
"Entrusting" the economy to businesspeople, Schumpeter explained, entails private
property, private profit, and private credit. In such terms you can see the rockiness of
the transition to capitalism in Russia, say, where agricultural land is still not private,
and where private profit is still subject to prosecution by the state, the jailing of millionaires, the cutting down of tall poppies. And what Schumpeter leaves aside in the definition, though his life's work embodied it, is that the society—or at any rate the people
who run it—must admire businesspeople. That is, they must think the bourgeoisie capable of virtue. It's this admiring of the bourgeois virtues that Russia lacks, and always
has, whether ruled by boyars or tsars or commissars or, as now, by secret police.
Attributing great historical events to ideas was not popular in professional history for a long time. A hardnosed calculation of interest was supposed to explain all.
Men and women of the left were supposed to believe in historical materialism, and
many on the right were embarrassed to claim otherwise. The “dream of objectivity,” as
Peter Novick called it, hasn’t work very well. Actual interest---as against imagined and
often enough fantasized interest---did not cause World War I. The Pals Brigades did
not go over the top at the Somme because it was in their prudent interest to do so. Nonslave-holding whites did not constitute most of the Confederate armies for economic
reasons. Nor did abolition became a motivating cause because it was good for capitalism. And on and on, back to Achilles and Abraham. Daniel Jonah Goldhagen famously
claimed about “Hitler’s willing executioners”---who were he argued the German people
as a whole, not just a few bad apples---that “not economic hardship, not the coercive
means of a totalitarian state, not psychological pressure, not invariable psychological
propensities, but ideas about Jews that were pervasive in Germany, and had been for
decades, induced ordinary Germans to kill” (Goldhagen 1996, p. 9). His book “reverses
the Marxian dictum, in holding that consciousness determined being” (p. 455). Hitler’s
Revolution (cite Iowa guy) “was, above all, a cognitive-moral revolution” (p. 456). We
do well to watch for cognitive-moral revolutions, and not simply assume that Matter
Rules, every time.
In 1600 English society, or at any rate the people who ran it, scorned the bourgeoisie and market considerations as much as Russia did in 1988. For example, because
of their association with interest-taking and buying low to sell high, not to speak of
Christ killing and the drinking of the blood of gentile children during Passover, it
scorned Jews, such as the Shylock of fiction and Rodrigo Lopez, the Jewish physician to
the queen of England in 1594 of actual fact. Yet by the 1650s some Jews of Amsterdam
were readmitted (Jews had been expelled from England entirely in 1290), as Puritans
and commercial boosters wished. In 1817 England began to be persuaded by a Jewishorigin political economist and member of Parliament, David Ricardo, to take market
considerations very seriously indeed. By 1868 it was even willing to elect a Jewishorigin prime minister—who, by the way, in keeping with the new times after 1848 on
the right and left advised against market considerations, and looked back nostalgically
in his politics and his novels to the anti-market ethical world of 1600.
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The claim of virtue for merchants and manufacturers was irritating to some people even by 1848. It still is in many circles. People see capitalism through Dickens’ later
novels, Thomas Naste’s cartoons of the Robber Barons, and Jacob Riis’ photographs of
sweatshops on the Lower East Side and NNN Booth’s accounts of London…….. and
Sinclair Lewis’ account of George Babbitt. But to go on and on and on attacking market
society on Marxist or Christian socialist or nostalgic conservative or haughty aristocratic
grounds damages our bodies and our souls.
I ask how the startling change in ideology after 1600 happened. Part of the
answer is, I find, is England's imitation in the late 17th century of the Netherlands, already bourgeois. Part, surely, is the emptying out of Christianity, at any rate in the
view of some advanced intellects, and anyway its redirection to this sublunary world in
the view of many others. Another and related part is a new philosophical and antiprovidential theme of prudence-only from Machiavelli through Hobbes to Bentham,
and with it the breakdown of a society of status, the great chain of being from king to
slave. The Enlightenment after Spinoza and Newton figures. So perhaps does Protestantism and the priesthood of all believers, reducing the prestige of priests. The absolute monarchs, allied with merchants against the troublesome but now gunpowdervulnerable dukes, turned their aristocrats in France and Japan and Russia into what the
Russians called a "service class," reducing the prestige of secular lords. The new national states play a role, if mainly merely the role of dangerously violent guardians of
the merchants—or often enough instead the guardians of the absolute monarchs and
their secret police.
And I ask why. The why, I'm afraid, the Lord only knows, and we will do well to
remain humble in imagining that we can see into His reasons. Does the conflagration
come from the match or the gasoline or the oxygen or the absence of a convenient fire
alarm or the lack of alertness on the part of the night watchman? The epidemiologist
Kenneth Rothman reports on a useful way of visualizing causes.517 Instead of a linear
model of Causes to Effects like Hume's billiard balls crashing, he notes that "causes" are
sometimes better thought of as a pie chart, all the mutually necessary causes of the fire
present:
517
Rothman…..
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presence of match
presence of oxygen
presence of gasoline
absence of extinguisher
absence of firefighter
presence of irresponsible boy
etc., etc., etc.
If your human interest, Rothman notes, wants to draw attention to the absence of
a handy fire-extinguisher, that absence too, can be added to the pie chart, and numerous other such hypothetical causes waiting in the wings. It's our call. It’s that way with
"causes." Their selection is more like a story than a syllogism. It’s our, human word.
The world beyond human speech, of course, puts limits on how big the slices can be—
most empty buildings have plenty of oxygen lying around, for example, and so it
would often not be of human interest to emphasize the presence of oxygen to explain
the burnt building—though the oxygen is a cause, and professional fire-fighters ruminate a good deal on sources of more or less of it to feed fires, speaking for example of
internal ventilating shafts as oxygen-supplying "chimneys." But the world by itself
doesn't tell us what is humanly interesting to name as "a major cause" of a fire.
The economist Joseph Schumpeter, discussing this very issue of the allocation of
causes between material and human, noted that: “every investigator will distribute emphasis as he pleases. . . . People will always differ as to whether the battle of Austerlitz
was won by Napoleon, or by a social system, or by the French nation, or by a military
apparatus and a technique inherited from the Revolution.”518 The same point is called
in Freud and I. A. Richards and Louis Althusser "over-determination." There is more
than one narrative cause, more than one slice of the Rothmanian pie, that you can assign
to answering why you married your wife, or indeed why you murdered her.
Perhaps some insight into the most humanly useful pie chart will emerge from
answering how. Let us so pray. The sheer statistical "rise of the bourgeoisie" in numbers seems part of the cause, a popular one. But it's not all-powerful, or else earlier, local concentrations of bourgeois in 5th-century Athens or 10th-century Chinese cities
would have caused the modern world before the modern world. The bourgeoisie, as
the economic historian Jack Fisher pointed out long ago, is always rising. And the connection between bourgeois numbers and bourgeois ideology was not inevitable. Confucian ideology, for example, until it began to be challenged in the late 17th century by
Japanese bourgeois theorists, viewed merchants as very nearly the lowest of the classes—above tanners, butchers, and night soil collectors, but not much. It is certainly not
the case that the “why” can be answered as, say, R. H. Tawney did in Religion and the
Rise of Capitalism (date), the sudden appearance in the 16th century of a new greediness
[cite exact page]. Marx himself would agree with me, and with Max Weber, that [Weber quote from BV]. People have always been greedy. Witness the theme of greed, or at
518
("Comments on a Plan for the Study of Entrepreneurship," unpublished, c. 1948, quoted in
McCraw, p. 471)
306
the least a persistent desire to improve ones material circumstances, in every folk literature from the Coyote tales of the Native Americans to the Thousand and One Nights,
{Irish folk tales and the Book of Samuel Gifts guy specifically down to tales; pick
one of the Nights; Synge book; look for greed stories in Samuel}. Greed is like oxygen in a well-ventilated building. It’s always there, and therefore not worth mentioning as causing the greatest change in the human condition since the invention of agriculture.
What seems simpler to answer than the why and its distressingly expandable
causes is: with what consequence? Bluntly, the coming of a bourgeois rhetoric made possible the modern world. Unless society admires businesspeople, as English society certainly did by 1848, and with less rhetorical clarity did even by 1748, in sharp contrast to
France in 1748, or England in 1600, it will not entrusts its economic process to the guidance of the private businessperson. No entrusting, no capitalism. No capitalism, no enriching of the world's poor. No enriching of the world's poor, no elevation of the
world's spirit. Bourgeois rhetoric was a necessary cause, the match or the gasoline as
you wish. Without it, no liberty, no literacy, no liberation of women, no breakdown of
taken-for-grantedness, no relief from the poverty and ignorance of our ancestors, yours
and mine, who were slaves, all of them, living on less than a dollar a day for tens of millennia. For the first time in the early 19th century, uniquely, and a little earlier in Britain
and much earlier in Holland, businesspeople even outside their own ranks, over a large
area of a globalized market, came to be a little bit admired. Or at least not crushingly
scorned. And European governments were briefly reined in by the same ideology, and
later at least by a balance of interests, from scooping out the bourgeois profits for the
greater honor of the state.
The bourgeois rhetoric, I am claiming, was a necessary condition, and maybe
even a sufficient one, for the industrial revolution and for democracy. That is, it was
necessary and maybe sufficient for the modern world. Certainly it is hard to see how an
economy can flourish if autocrats, aristocrats, bureaucrats, patrocrats scorn the bourgeoisie, and are able to implement their scorn ("-crat" < kratos, "might, force") by putting
hooks and chairs in the path of enterprise. Though one must be on the alert, as Adam
Smith warned, of plutocrats, too, and what they can do via the country club in corrupting politics, the other crats have been uniformly worse for ordinary people. Killing a
bourgeois-friendly rhetoric caused otherwise flourishing societies in the past to stagnate, at any rate by comparison with the rising world real income per head by a factor
of eight in the face of population growth by a factor of six that bourgeois Europe has led
since 1800. Thus Greece in its prime, Rome under the good emperors, China in the
Ming dynasty, Japan under the Tokugawa shogunate. Such economies produced lovely
vases for the ruling class but scant wheat or rice for the poor, and for the masses no
cheap housing, transport, education. In our times an anti-bourgeois ideology has
caused the economies of Venezuela under Chavez, Cuba under Castro, China under
Mao, and leading them all Russia under Lenin and Stalin and Brezhnev to fail. If under
a strictly anti-bourgeois ideology you close down vegetable markets and make home
restaurants illegal, as the Cuban government did in the 1990s, you don't get many vege-
307
tables or restaurants. You can counterclaim if you wish that socialist economies failed
because of imperialist intervention. I suggest that you are mistaken in your claim.
They have failed regularly in the various experiments from New Harmony and the Paris Commune to the Bolsheviks and the British Labour Party not from their stars but
from themselves. They would have failed if they had taken place on the nether moon.
No bourgeois virtues, no modern world.
Smith’s assertion that freedom required exchange, not beggary, like Thomas Jefferson’s land-owning in aid of independence Self-Help, as Samuel Smiles put it revives
an ancient, and even conservative, program of dignity. The great popularizer of classical political economy, Harriet Martineau, wrote of financial independence that it made
possible an attitude of “Here I stand, and I defy anyone to despise me.”519 Luther’s
faith or the businessman’s treasure or the freeholder’s farm made independence possible.
Reproduce here the odd Dutch painting
of a bourgeois and his daughter in the presence of paupers.
And it is not very controversial to claim that the bourgeoisie stands against certain kinds of tyranny. Not all of them so stand, alas. A plutocratic, country-club tyranny of big oil and little property development has long been the power elite of the United
States. But after all it is not the worst kind of elite—if you want to experience the worst
kind of elite try a politburo or an aristocracy or a Robert Mugabe absolutely corrupted
by absolute power. Perhaps if we keep whining the country club will graciously relent.
And perhaps we can from time to time vote it out of office. And after all it is not perpetual: Sam Walton comes, the Adams family goes, and in the meantime the economy
thrives and not too many people are killed.
The old liberal claim is that from the representation of the third estate in Parliament and the legal decisions of the parlements came the Western model of liberty. Admittedly, this naively optimistic, Whiggish history, the standard line in the 19th century,
especially in Britain and its offshoots, has been heavily challenged by more cynical historians in the 20th century. But the optimistic story has at least one merit over competitors, such as the economic origins of the American constitution or the cultural logic of
late capitalism. It's merit is that it is true. Without a bourgeoisie—Cuba's, for example,
removed to Miami, leaving Cubans defenseless—no one stands against a tyrant. In an
age of literal aristocrats one can depend on the Catos and the Hampdens to stand up.
But lacking aristocrats nowadays we must fashion bourgeois protesters out of lawyers
and ministers and the occasional outraged businessman.
My beginning point here is something I have reluctantly concluded after decades
of thinking the exact opposite. It is: The alleged materialist causes of the modern world
don't work. Or to put it more precisely, they work much too easily, and must therefore
at best be enabling conditions, that oxygen, relevant but unhelpfully labeled “causes.”
Many other countries at many other times have had the material circumstances of Birmingham or Philadelphia or Glasgow. If comparative prosperity and a fully market519
Poor Laws and Paupers Illustrated, 1831, p. 196, quoted in Searle 1998, p. 261.
308
ized economy sufficed, then parts of India would have industrialized before Britain did.
If foreign trade was an engine of growth, then Portugal, a great trading power from the
15th century on, not England, would have manufactured textiles, to be traded within
Portugal for port wine, in accord with principles of regional comparative advantage
that would have been articulated in, say, 1617 by a Portuguese converso, rather than in
1817 by a Church-of-England-professing English descendent of Portuguese Jews named
David Ricardo. If the decline of feudalism and the rise in numbers of a bourgeoisie sufficed, then Japan would have led the modern world, or Athens and greater Greece
would have made the modern world in the 5th century, as it made most other things. If
coal were it, China would have made Manchuria into a Rhineland. If an accumulation
of surplus value provided an original accumulation of capital for full-blown capitalism,
then pharaohs would have erected linen factories rather than pyramids.
And so, I am beginning to conclude, in a struggle against all my thinking and
economic training since I began studying the dismal science so long ago, that attitudes,
beliefs, the circumstances of conversation, in a word, "ideology," or, in a better word,
"rhetoric," or “speech,” must be it, the "it" that briefly distinguished northwestern Europe and its offshoots from the rest, and now stands ready to save the poor of the planet.
*
*
*
*
A formal way of putting all this is the Rube-Goldberg diagram below. {still under construction; I may have it by January} If you have patience with tangled arrows and bold type you will grasp the arguments to be made here—not the evidence, of
course, since a diagram is not evidence. But at least you will know the claims I am making, plausible or crazy, about the causes of the modern world. Some of the claims are
entirely uncontroversial, and will need no evidence—for example, that the coming of
gunpowder in the 15th century reduced worldwide the prestige of the aristocracy, those
proudly armored knights and samurai. Others are accepted widely by, say, specialist
economic historians, but are not known by outsiders—for example, that contrary to Adam Smith and Karl Marx the accumulation of capital had little to do with early industrialization. And some are peculiar to my own argument—for example, that changes in
freedom of speech allowed the honoring of bourgeois virtues such as hopeful invention
and prudent projecting.
Variables in diagram: imperialism, periphery, exploited working class,
prestige of A, prestige of B, free speech, absolute monarchs, nationalism,
Adam Smith trinkets to aristocrats, gunpowder, age of discoveries, foreign trade, rich trades, thrift, Protestant ethic, priesthood of all believers
(vs. hierarchy of Roman church), scientific discovery, skills of instrument
makers, wave of gadgets, prestige of inventors, property rights enforced,
taxation moderate, taxation not arbitrary (or class based), evangelical religion, responsibility, printing press, literacy
*
*
*
*
The American historian Thomas Haskell wrote in 1999 a characteristically luminous essay pointing to an "escalating sense of human agency" in the 17th and especially
the 18th centuries. He finds an index in the very word "responsibility." The word, he
309
notes, is a surprisingly recent import from French. He finds it first in Federalist Papers,
Number 63. Though "responsible" itself was available much earlier in French, only by
about 1600 does English take it up, in an obsolete meaning of "responding to something." It had an American legal use dating from 1650 of "required to appear in court to
respond to a charge." The word bumped along in such homely usages for two centuries. It only acquired its magnificence as a concept in liberal theory, Haskell observes,
in the middle of the 19th century. The OED finds a use of "responsible" as "morally accountable for ones actions; capable of rational conduct" (sense 2b) only as early as 1836
("The great God has treated us as responsible beings"). Haskell himself, relying on
Richard McKeon, credits Alexander Bain in 1859 as the "earliest philosophical treatment," of "responsibility." Mill agreed in 1865 with Bain that it was better thought of as
"punishability."
Haskell, like me, thinks there was an ethical change in the West in the decades
around 1800, with roots back in the turbulent 17th century, that made us modern. He
and I suspect it had to do with the increasing scope of markets. (Though as an economic historian I have perhaps a sharper sense that ancient Mesopotamia and medieval
England had plenty of markets, too: the change is a matter of scale, as Fernand Braudel
has argued at length.)
Yes, to be sure, the wider market can corrupt morality, and sometimes it does.
No one is denying that the Enron scandal was scandalous. But Haskell's claim is that
commerce also enhances responsibility. After all, Jeffrey Skilling and even Kenneth
Rice, who turned state’s evidence, went to jail. Haskell emphasizes that an enhanced
sense of agency does not always work for good, and one has to agree. The 20th century
developed an altogether grotesque sense of agency---as Isaiah Berlin put, it ………..
The outcome in the 20th century was, to put it mildly, not all good news.
But it can work for good sometimes, this new sense of agency and responsibility.
An important historical example is the very commerce that made black slavery a New
World institution (instead of as formerly only an African and a Moslem and in a minor
way a European institution). The commerce, and associated technical changes, provided the shocking "expansion of causal horizons . . . for good or evil" (p. 22) that at length
killed slavery. An institution that had existed with scant criticism from the earliest records of humankind was killed in a century of anti-slavery agitation 1787-1887 by Christian and especially Protestant and especially Quaker and commercial Europeans. Note:
commercial.
Here the notion of a “idealism of ordinary life” in the style of Ibsen. Niebuhr quotes Hegel (Friedrich von Hegel, Eternal Life, p. 255) that the goal of religion is
"a sufficient otherworldliness without fanaticism and a sufficient this-worldliness without Philistinism."520
520
(Niebuhr 1952, Chp. 3, introduction)
310
And, following his same logic—à la Marx: capitalism raises up its own gravediggers—the expansion of causal horizons contributed to the rise of European socialism. If social problems—the very phrase was coined in the 19th century—are not God's
will, Allah be praised, but the responsibility of someone, or of a whole social class, then
they can be solved: knock off the person or the class, the slaveholder or the bourgeoisie.
Such an argument would help explain the paradox that the first world-scale bourgeois
society came in its clerisy after 1848 to detest the bourgeoisie.
But—and here is my own main point—Haskell's word "convention" would better
be replaced by "rhetoric," not in the cheap sense we have from that anti-democrat Plato
but in the glorious sense forming European education since Protagoras and Aristotle:
the means of unforced persuasion. My friends would expect me to say that. But consider that if the R-word is used we get access to the machinery of rhetorical analysis
built up since 5th-century Sicily. The machinery is formidable, though Plato did such a
good job of casting doubt on democratic methods of persuasion that it has had to be reinvented with much fanfare in every intellectual generation since 1625. Reckoning
backwards from the present to the anti-rhetorical 17th century in Europe, it has been reinvented with more or less—usually less—realization that it is a reinvention dozens of
times. by cultural studies and subaltern studies folk, Derridian deconstructionists, ordinary language philosophers, rhetorical revivalists, Kenneth Burke, general semanticists, …..
Anyway, rhetoric alerts us to how language works. We are alerted, for example,
to the role of the metaphor of father-child in the defense of slavery, very prominent
among the boers of the Cape Colony, for example, or, again, to the role of the new vocabulary of "social problems" in generalizing the experience of the anti-slavery agitation
to the liberation of women and then the underclass of London and Chicfago. That is, if
we focus on the very words we get to use word lore, just as Haskell did. Many of
Haskell’s and my colleagues in history are uncomfortable, as Haskell observes acidly, in
the presence of "ideas," which we might as well call "philosophy." But they are also uncomfortable in the presence of "words," which we might as well call "rhetoric." No literary criticism, please. We're historians.
Another historian of ideas and of words, J. G. A. Pocock, put my substantive rhetorical claim about 1600-1848 very well, decades before it had occurred to me: “In every
phase of Western tradition, there is a concept of virtue—Aristotelian, Thomist, neoMachiavellian or Marxian—to which the spread of exchange relations is seen as presenting a threat. In this perspective those thinkers of the seventeenth through nineteenth centuries who argued on individualist, capitalist or liberal premises that the
market economy might benefit and transform human existence appear to be the great
creative heretics and dissenters.”521
The heretical triumph came about crudely as follows. In the classical Mediterranean world the annoyed rhetorical question was, "Who cares about the economy? That's
for slaves and women and metics to deal with, or those awful merchants. What matters
521
Pocock 1985, p. 104.
311
is transcendent honor, timê, fama." Thus the honor-driven expedition to Syracuse in 415413 BC or the honor-driven rivalries destroying the Roman Republic. A later and Christian version of the classical Mediterranean world declared, "Who cares about the economy? What matters is transcendent soul, psychê, animus." Thus Christian asceticism and
the first monasteries in the wilderness. In the 13th century the urban monks like St.
Thomas of Aquino and St. Francis of Assisi modified the declaration a little: "What does
matter, to be sure, is animus aeternus. But honest trade in an economy is not wholly corrupting, and can serve transcendent purposes." Two centuries later some of the followers of Luther and Calvin recurred to the earlier themes: "On the contrary: trade can be a
terrible corruption. Let us build a communal city of God."
The greater modification, spreading in the 17th century in places like the Netherlands or, later, in England and, still later, in Japan, said "No, no: we should care about
the economy—if only, you see, for the transcendent honor of king and country." Attention came to be paid, and in the 18th century mercantilism reigned from Paris to Edo.
But the final modification was the greatest, and decisive in that making of the
modern world: "Yes," said Locke, Montesquieu, Voltaire, Hume, Smith, Paine, Wollstonecraft, Jefferson, Austen, Macaulay, Manzoni, "we should care about the economy,
but not for mercantilist reasons of state. We should care because ordinary people in
such a regime"—the egalitarianism of the thought is its most heretical feature—"will by
it flourish in this world, benefiting and transforming human existence."
As indeed it did.
312
I gather here some notes that even this rough draft has not fitted
in, perhaps for the good reason that they do not fit:
It’s an old-fashioned analysis but correct that bourgeois concerns prepared for
freedom as much as for economic growth. Tacitus observed somewhere (find), "rare is
the felicity of the times when you can think what you like and speak what you think."
Rare indeed. Why did Japan not grow? Why did Rome not? An absence of free
speech. Abolition is an example. The first religious body to speak against slavery in the
New World was the Germantown meeting of Quakers in 1688, themselves precarious in
many parts of Europe. Quakers were early against it, and they early were for the strictest spiritual equality between men and women, and very willing to say all these things,
being careful to use “thee” and “thou” in doing so. The first place to outlaw slavery
was the state of Vermont, in 1777. David Brian Davis wrote that “the spontaneous upsurge of antislavery movements that began in Britain in the late 1780s was truly unique.
. . . It drew on . . . religious developments that went back to the civil wars of the midseventeenth century.”522
.
But I am not suggesting a reduction to electoral determinism: the particular forms of
“bourgeois” policies were unpredictable. In Britain and parts of Germany the survivals
were plainly because there had been no French Revolution. Thus freedoms of AustroHungarian Empire, or for that matter a Britain in which literal born-aristocrats served in
cabinets. Politics that retained aristocratic/peasant elements survived late in Europe.
Peace and justice have always been claimed as essential for bourgeois society.
“How useful it would be from time to time to set up all the most common political and cultural terms in a row for reappraisal and disinfection. . . . For instance, liberal
would be restored to its original significance and freed of all the emotional overtones
that a century of party conflict has attached to it, to stand once again for ‘worthy of a
free man’.”523
&
Jack Goldstone (at length) on the Early Modern, draft of The Problem of the `Early Modern’ World
What mattered is that in some nations, the world-wide revolts and rebellions of the 17th
century, due to particular cultural frameworks prevailing among certain elites, produced liberalizing regimes, overturning the grip of government and religion on society
522
523
Davis 2033, p. 38.
Huizinga 1935, p. 112. And see p. 127f.
313
and breaking the monopoly on power of traditional elites. . . . During these centuries
Asian civilizations underwent major growth and extension of their market networks,
developed new technologies for the production of cotton and ceramics, and greatly expanded the size of their populations and economies. . . .
Despite the continuing strength of other forces, such as the aristocracy in England and the bureaucracy in France and the army in Germany. This allowed economic
growth to continue. The natural corruptions this time usually worked in growthfavoring directions. {But the ethical link was severed: next volume; but do not
anticipate much }
The present moment [1830] is one of great distress. . . . Yet is the country
poorer than in 1790? . . . . A single breaker may recede; but the tide is evidently
coming in. If we were to prophesy that in the year 1930 a population of fifty millions, better fed, clad, and lodged than the English of our time, will cover these
islands; that Sussex and Huntingdonshire will be wealthier than the wealthiest
parts of the West Riding of Yorkshire now are, . . . that machines constructed on
principles yet undiscovered will be in every house. . . many people would think
us insane. . . . If any person had told the Parliament met in perplexity and terror
after the crash in 1720 that in 1830 the wealth of England would surpass all their
wildest dreams, . . . that London would be twice as large and twice as populous,
and that nevertheless the rate of mortality would have diminished to one half of
what it was then, . . . that stage coaches would run from London to York in twenty-four hours, that men would be in the habit of sailing without wind, and would
be beginning to ride without horses, our ancestors would have given as much
credit to the prediction as they gave to Gulliver’s Travels. Yet the prediction
would have been true . . . . We cannot absolutely prove that those are in error
who tell us that society has reached a turning point, that we have seen our best
days. But so said all who came before us, and with just as much apparent reason.
. . . On what principle is it that, when we see nothing but improvement behind
us, we are to expect nothing but deterioration before us?
Macaulay,
“Southey’s Colloquies on Society” (1830)
The bourgeoisie . . . has put an end to all feudal, patriarchal, idyllic relations. . . . It has been the first to show what man’s activity can bring about. It has
accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts,
and Gothic cathedrals; it has conducted expeditions that put in the shade all
forms of Exoduses of nations and crusades. . . . National one-sidedness and narrow-mindedness become more and more impossible. . . . The bourgeoisie . . .
draws all, even the most barbarian, nations into civilization . . . . The bourgeoisie
has . . . rescued a considerable part of the population from the idiocy of rural life.
314
. . . The bourgeoisie, during its rule of scarce one hundred years, has created
more massive and more colossal productive forces than have all preceding generations together. . . . [W]hat earlier century had even a presentiment that such
productive forces slumbered in the lap of social labor?
Marx and Engels
The Communist Manifesto, 1848, Part I
F. L. Bender, ed., Norton Critical Edition,
W. W. Norton, NY, 1988, pp. 57-59
If it's freedom one should be able to measure the difference between Japan and England. Foreign trade is utterly trivial in Japan, some 1 or 2 % of national income. My integration project is the economic trace of freedom. When the price structure is the same
in two countries they are in trade, and restrictions are not effective. Also samurai's rice
allotment was quite large, and the class was, too—more like Eastern than Western Europe.\
&
Christopher Berry, 1992, p. 76: “What is necessary [in Smith] for social existence
is not beneficence, since a company of merchants can subsist without it (TMS, 86), but
justice. Society cannot subsist at all among individuals who are ready to injure each
other” [bring in Field]. Further, Smith wrote, “we may often fulfill all the rules of justice by sitting still and doing nothing” (TMS, p. 82). Justice in modern freedom is laissez
faire, quite contrary to the civic action of ancient freedom.
&
How to solve the problem of fitting individual morality into social:
The Classical Republican Problem
.
&
The market spreads American habits of cooperation with strangers. In America,
noted Santayana, “co-operation is taken for granted, as something that no one would be
so mean or short-sighted as to refuse” (p. 196), and it is “private interests which are the
factors in any co-operation” (p. 226). He does not here mean that prudence only makes
for cooperation: “When interests are fully articulated and fixed, co-operation is a sort of
mathematical problem,” in the manner of Hobbes; but Santayana saw much more arising from “a balance of faculties.”524
&
524
Santayana, Character, pp. 223, 222.
315
The effect of the French Revolution on the Scottish Enlightenment was similar to the effect of the Cold War on American progressivism. As Dwyer notes (p. 190), the inauguration of the Edinburgh Review in 1802 “hammered the nails in its coffin”: a spirit of party took hold, exactly as in the Cold War.
&
The education system of Scotland was superb, much better than England’s from
the local school dominie [??] to Adam Smith, Professor of Moral Philosophy. Edinburgh University (as it was called) alone had in 1780 about 1000 students including
English dissenters (Smout, p. 354), which was two or three times that in Oxford and
Cambridge combined. The universities were independent of religion, after a struggle
early in the 18th century, and thus secular philosophy flourished as it could not possibly
at Oxbridge, where all instructors had to take holy orders. Further, the teaching was
superb. Why? Because the students paid to professors directly (Adam Smith makes
much of this). Law was the standard way to get rid of younger son of a laird not advance as a poor man, or even a merchant’s son. The law was Continental, and commonly entailed therefore a Continental education.
Edinburgh has about the population of Iowa City (thus, too Athens and Florence). The little towns modeled themselves after one or the other, mad for learning or
for enterprise (Smout 1969, p. 342). Edinburgh was the home and model of Bildungsbürgertum, Glasgow of commercial middle class. Smout quotes Hugo Arnot in 1779:
dependent “chiefly upon the college of justice, the seminaries of education and the inducement which as a capital it afford to genteel people to reside in it” (Smout p. 355).
Riotous, like London yet as it was said, “a part of the state” (Chambers, quoted in
Smout, p. 345). Only 2 people died in the eight major riots between 1740 and 1791.
James Stuart, Critical Observations on the Buildings and Improvements of London, pp.
41,42,47, cited in (Langford, p. 425): virtue in cities greater. Langford argues that “the
pursuit of genteel status and the acquisition of polite manners in some measure united a
class which in other respects appeared diverse and divided” (Langford, p. 59). “Gentility was the most prized of all possessions in eighteenth-century Britain” (Langford, p.
329). Joseph Massie’s table of 1759: Annual family income above L40 = 2/5 of the population, by Massie’s table and Lindert/Williamson revisions (EEH 1982: 395-408). Earning L50 and above, about 1/5 or a little less. Per capital income at about L10 a head.
About L20 was subsistence for a family. “The apparently limitless appetite of the middling ranks for social status, as powerful a motive to enterprise and industry as the lust
for worldly goods” (Langford, p. 65). (Langford, p. 71 claims there were manuals of
advice for middling folk. Find them.
The “sentimental revolution” of the 1760s and 1770s expressed “the middle-class
need for a code of manners which challenged aristocratic ideals and fashions” (Langford, p. 461). A bourgeois audience led to the sentimental revolution, which led in turn
to personal ethics [ethics rather than morality], which supported Romanticism. “The
English contribution to the use of sentiment was to turn it into a tool of piety rather than
316
paganism” (Langford, p. 467). Hume remarked testily of the English that they were “relapsing into the deepest stupidity, Christianity and ignorance.”525
&
Respectability: with it came religious tolerance. It became gradually vulgar to be antiCatholic.
&
Smith’s moral sentiments can be brought into U-Max in various ways. One is
minimization of regret, “regret” being a discounted future sum of deviations from desirable behavior which may be simply pleasurable, which is the utilitarian case, or adhering to a desirable character. The “desirable character” could be defined in a religious way, as adherence to The Law, or to the Life of Christ. Smith secularizes it as the
sentiments of the “Impartial Observer” which is an intellectual tactic common to the
18th century, as in Kant’s Reason; or indeed in Hume and Bentham’s Utility. But in any
case a regret depends on memory, and therefore on culture and morality. One contemplates not doing the right thing, by whatever standards one adheres to, and reflects on a
life of regret. Lord Jim in Conrad’s novel betrays his duty as chief mate of the Patna,
bound for Mecca with pilgrims aboard. He regrets all his life his impulsive act of abandoning ship.
The notion of regret brings society into maximization. The Impartial Observer
views some patterns of consumption and production as better: among other virtues expressed in consumption, a pattern with room for charity and great-heartedness; and
among those expressed in production, for enterprise and prudence. The economist asks
whether the patterns can be reduced to the shape of the utility function in which case
nothing is gained over rude utilitarianism. Or, better, he asked whether the patterns
contain empirical content. They do. To bury the Impartial Observer in the head of an
isolated consumer, and treat it therefore as economists do as an unanalyzed datum,
“taste,” is a scientific mistake. Smith offers hundreds of empirical regularities concerning the Observer: for example, that the Observer takes a dim view of anger (pp. 35-38)
but a bright view of benevolence (p. 38ff).
Ambition was linked in Smith of course with avarice, p. 50; but with spirit, too,
in a good sense, p. 55); though on the whole a “passion” and dangerous: “And thus,
place, that great object which divides the wives of aldermen, is the end of half the labors
of human life; and is the cause of all the tumult and bustle, all the rapine and injustice,
which avarice and ambition have introduced into this world.”526
&
Smith wrote a three-page encomium on bourgeois virtues: The “private man,” as
against “the man of rank and distinction,” “has no other fund to pay [for followers], but
525
526
Langford, p. 468.
TMS 57; cf. p. 149.
317
the labor of his body, and the activity of his mind. He must cultivate these therefore; he
must acquire superior knowledge in his profession, and superior industry in the exercise of it. He must be patient in labor, resolute in danger, and firm in distress.”527
&
The bourgeois man on the Rialto must moderate his passions to a level that
strangers will feel sympathy for. But then the sympathy expressed will be comforting.
On both counts, the moderation and the comfort, he is made tranquil. “Society and
conversation, therefore, are the most powerful remedies for restoring the mind to its
tranquility. . . . Men of retirement . . . seldom possess that equality of temper which is
so common among men of the world” (I.i.4.10, p. 23). This is not a portrait of an aristocrat (pure self-control, without social contact) or of a peasant (pure love, again without
regard to the audience the rhetoric in the situation). It is a portrait of a bourgeois.
Smith’s theory is therefore highly rhetorical. Smith had a conjective theory of ethics.
Smith was directly and vividly aware of the Problem of the Two Virtues, peasant and
aristocratic. Stewart speaks explicitly of “two different sets of virtues” (Stewart, “Account,” p. 282, sec. II. 16.5): the two being Christian and Stoic, love and self-command.
“The man of the most perfect virtue . . . is he who joins, to the most perfect command of
his own original and selfish feelings, the most exquisite sensibility both to the original
and sympathetic feelings of others. The man who, to all the soft, the amiable, and the
gentle virtues, joins all the great, the awful, and the respectable, must surely be the natural and proper object of our highest love and admiration” (TMS III.3.35, p. 152).
Smith’s theory of sympathy runs parallel with his theory of rhetoric. The speaker, the
“person principally involved,” is aristocratic, the audience of “spectators” is peasantlike. The attempts to communicate establish a leveling of sympathy, a republic of virtue.
As Stewart describes it, “our moral judgments with respect to our own conduct
are only applications to ourselves of decisions which we have already passed on the
conduct of our neighbor.” (Stewart, “Account,” p. 280, sec. II.7) The Spectator adjusts
to the play. {Cf. Billig.} To the extent that moral sentiment is an argument, taking place
among equals, it is rhetorical and bourgeois. He draws the moral immediately, contrasting the “amiable” virtue of “the spectator to enter into the sentiments of the person
principally involved” and the “respectable” virtue of moderating the passions as “the
person principally involved,” the actor (p. 23, I.i.5.1). This he brings under one theory:
“to restrain our selfish, and to indulge our benevolent actions, constitutes the perfection
of human nature” (I.i.5.5, p. 25). “As to love our neighbor as we love ourselves is the
great law of Christianity, so it is the great precept of [pagan and Stoic] nature to love
ourselves only as we love our neighbor,” that is, with restraint (same).
For example his discussion of anger, which is directed to how the passion plays
to an audience. Anger can have utility in frightening the person provoking it, but must
be expressed to the Impartial Spectator with caution. Anger, resentment, hatred have
527
TMS, p. 55.
318
utility to the individual “by rendering it dangerous to insult or injure him.” 528 But
“though their utility to the public, as the guardians of justice, and of the equality of its
administration, be not less considerable,” “yet there is still something disagreeable in
the passions themselves. . . . It is the remote effect of these passions which are agreeable; the immediate effects are mischief to the person against whom they are directed.
But it is the immediate, and not the remote effects of objects which render them agreeable or disagreeable to the imagination.”529 ( “Mere expressions of spite inspire it against
nobody, but the man who uses them.”530 “Smaller offenses are always better neglected.” (p. 38) “It must appear, in short, from our whole manner . . . that if we yield to the
dictates of revenge, it is with reluctance, from necessity, and in consequence of great
and repeated provocations.”531 It must appear, says Smith repeatedly. His is a theory of
efficacious performances.
&
The native-Chinese search engine Baidu had by 2006 had more success in China than
Google because it encouraged companies to buy rankings in the search. Americans,
from a society that sharply separates the profane from the sacred, are scandalized by
such a practice. Money corrupts, they say. Therefore Google will not accept payment
for higher ranking. To do so in the United States would undermine belief in the usefulness of the rankings. But ordinary Chinese, with a stronger faith in prudence-only than
the Americans, regard willingness-to-pay as itself a certification of excellence. Of
course Americans sometimes follow the same reasoning, as when they call the company
in the Yellow Pages with the largest advertisement.
Has business is fact become ethical? The propositions seems laughable in an economy
of grotesquely high pay for CEOs. An obscure Norwegian-American professor of finance at the University of Iowa's Tippie School of Business named Erik Lie (pronounced, it should be noted, "Lee") in …… [his first paper?] looked into options on
company stock. The option to buy at the $10-a-share price the stock was selling for on
June 1, 1995 is of course quite valuable if a virtuous CEO by hard work and tacit
knowledge can bring the company to profitability, and the share a year later to $20.
That's the justification for stock options. It's a good one. Everyone is made better off if
companies are run well. What Professor Lie discovered, however, is that management
was sweetening the deal by routinely lying about when the option was dated. Suppose
the CEO in fact from his incompetence has a year after June 1, 1995 driven down the
price of the stock, to $9 a share. How to still make him rich when he leaves? Ah hah:
backdate the option, that is, claim that he actually got the option on December 1, 1994,
528
529
530
531
TMS, p. 35.
TMS, p. 35.
TMS, p. 37.
TMS, p. 38.
319
when the stock was languishing at $5 a share. By lying (with apologies to Professor
Lie), the management assures its own enrichment. Lie found that thousands of companies were doing this, not just a few bad apples—in late 2006 even the sainted Apple
computer company was caught doing it.
320
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