Deirdre Mccloskey Quotes

Nor during the Age of Innovation have the poor gotten poorer, as people are always saying. On the contrary, the poor have been the chief beneficiaries of modern capitalism. It is an irrefutable historical finding, obscured by the logical truth that the profits from innovation go in the first act mostly to the bourgeois rich.

The change in rhetoric has constituted a revolution in how people view themselves and how they view the middle class, the Bourgeois Revaluation. People have become tolerant of markets and innovation.

What will matter in fifty years in economic history is poverty and its ending, and in political history what will matter is tyranny and its ending. If poverty and tyranny are ended, the rest follows.

the much-maligned “capitalism” has raised the real income per person of the poorest since 1800 not by 10 percent or 100 percent, but by over 3,000 percent.

The economy, like science or art, is more like an organism growing uncertainly toward the light than a steel machine repeating exactly today and tomorrow what it did yesterday.

Virginia Woolf wrote famously, “About December 1910 human nature changed.” Well, one doubts it. What did change, and has been changing all through the closing decades of the 19th century, is that the intelligentsia became increasingly alienated from the bourgeois world from which it sprung, and wished to become something Higher. It wished to make novels difficult and technical – think of Woolf or Joyce – to keep them out of the hands of the uneducated and to elevate the intelligentsia to a new clerisy, a new aristocracy of the spirit. Similarly in painting, music, and philosophy. It wished to make everything difficult and technical, and it succeeded. [Economists Lawrence] Klein, [Paul] Samuelson, and [Jan] Tinbergen were middle-period modernists. The vices of modernism come from the master vice of Pride, the vice so characteristic of an actual or wannabe aristocracy. It is prideful overreaching to think that social engineering can work, that a smart lad at a blackboard can outwit the wisdom of the world or the ages, that a piece of machinery like statistical significance can tell you how big or small a number is.

That businesspeople buy low and sell high in a particularly alert and advantageous way does not make them bad unless all trading is bad, unless when you yourself shop prudently you are bad, unless any tall poppy needs to be cut down, unless we wish to run our ethical lives on the sin of envy.

The way to help the poor, in short, is to let the Great Enrichment proceed by commercially tested betterment, as it has widely since 1800 and especially in the past forty years.

People are motivated in varying proportions by prudence, temperance, courage, justice, faith, hope, and love, together with the corresponding vices.

Modern liberals do not sit anywhere along the conventional one-dimensional right-left spectrum of governmental coercion.

But it didn’t have the Great Enrichment because it didn’t have the ideas flowing from a free people. Ideas, not savings, did it. Liberalism, not empire.

Commerce works better than theft.

By contrast, human action, to use the “Austrian” economic term, is not merely reactive to constraints and utility functions but active and creative, the exercise of the free and creative and (some of us think) God-given will that can say yes, or no.

For reasons I do not entirely understand, the clerisy after 1848 turned toward nationalism and socialism, and against liberalism, and came also to delight in an ever-expanding list of pessimisms about the way we live now in our approximately liberal societies, from the lack of temperance among the poor to an excess of carbon dioxide in the atmosphere. Antiliberal utopias believed to offset the pessimisms have been popular among the clerisy. Its pessimistic and utopian books have sold millions. But the twentieth-century experiments of nationalism and socialism, of syndicalism in factories and central planning for investment, of proliferating regulation for imagined but not factually documented imperfections in the market, did not work. And most of the pessimisms about how we live now have proven to be mistaken. It is a puzzle. Perhaps you yourself still believe in nationalism or socialism or proliferating regulation. And perhaps you are in the grip of pessimism about growth or consumerism or the environment or inequality. Please, for the good of the wretched of the earth, reconsider.

The Harvard philosopher John Rawls articulated what he called the Difference Principle: if the entrepreneurship of a rich person made the poorest better off, then the higher income of the rich entrepreneur was justified.7 It makes a good deal of ethical sense. Equality does not.

The big economic story of our times is not the Great Recession of 2007–2009, unpleasant though it was. Now it’s over. The big story is that the Chinese in 1978 and then the Indians in 1991 began to adopt liberal ideas in their economies, and came to welcome creative destruction.

Ideas of human dignity and liberty did the trick, making the inventions and then investments profitable for entrepreneurs and the nation. As the economic historian Joel Mokyr puts it, “economic change in all periods depends, more than most economists think, on what people believe.

You will probably object to Weber’s definition of the government as a monopoly of coercion. You will certainly object to Tolstoy’s definition, in 1857, of the government as “a conspiracy designed not only to exploit, but above all to corrupt its citizens.”5 And you will object vehemently to the more recent definition along the same lines by the anarcho-capitalist economist Murray Rothbard (1926–1995), of the government as “the most extensive criminal group in society.” 6 Murray used to say that the government is a band of robbers into whose clutches we have fallen.

The emotional pattern seems to be something like, “[Karl] Polanyi, a person of the left like me, says many true things, beautifully. Therefore his tales about what happened in economic history must be true.” Marx before him got similar treatment. Lately the more eloquent of the environmentalists, such as Wendell Berry, get it too. People want to believe that beauty is truth. A supporting emotional frame on the left arises from the very idea of historical progress: “We must be able to do so much better than this wretched capitalism.” It is not true, but it motivates.

As an Italian liberal, and anti-fascist, Benedetto Croce, put it in 1928, “Ethical liberalism abhors authoritarian regulation of the economic process [equally from the left as from the right, from socialism as from fascism], because it considers it a humbling of the inventive faculties of man.”3 In

One suspects that the conservatives of left and right don’t much like the “mass” and its badly informed preferences. Let us take care of you, they cry. Let tradition celebrated by wise elders, or planning implemented by wise experts, guide you, oh you sadly misled mass. (The ruling lords and the monopolists view the clerisy’s conservative theorizing with delight, resting assured that the elders and the planners will inadvertently shield their rents.)

Yet each favor and handout and protection of vested interests shifts the direction of capital and labor artificially, resulting in over-investment in, say, mortgaged houses, or over-investment in corruption to get and maintain restrictions on entry to, say, ownership of taxi medallions, or over-investment in a war to protect slavery. Of course, any proposal to drop the mortgage-interest deduction or to let Uber and Lyft compete freely with medallioned taxis raises political storms. Or a Civil War.

The Great Enrichment was so big, so unprecedented, that it’s impossible to see it as coming out of routine causes, such as trade or exploitation or investment or imperialism. Economic science of an orthodox character is good at explaining routine. Yet all such routines had already occurred on a big scale in China and the Ottoman Empire, in Rome and South Asia. Slavery was common in the Middle East, trade was large in India, the investment in Chinese canals and Roman roads was immense. Yet no Great Enrichment happened.

Therefore, having a lot is not immoral. It is the good luck to be born in America or Japan or Denmark. The “luck” consists chiefly of a modern liberal ideology of innovism combined with reasonably honest courts and reasonably secure property rights and reasonably non-extractive governments and reasonably effective educational systems, and a reasonably long time for the reasonably good ideas, and especially the innovations, to do their work. By all means let’s spread the good luck around—by persuading people to a modern liberalism leading to the Great Enrichment, and a full life.

[Adam Smith] was above all an ethical thinker. He wrote the two books, The Theory of Moral Sentiments (1759, finishing the much-amended sixth edition just before he died, in 1790) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776, with its own sixth edition, slightly amended, appearing in 1791). Such a meager output would make him a borderline case for tenure nowadays in many universities, and a sure-fire no in most departments of economics. “Good Lord,” the economists would say after a hurried look at his academic credentials, “he didn’t publish any articles in the American Economic Review reporting statistical tests or field experiments or mathematical proofs of existence!

Ethics has three levels, the good for self, the good for others, and the good for the transcendent purpose of a life.1 The good for self is the prudence by which you self-cultivate, learning to play the cello, say, or practicing centering prayer. Self-denial is not automatically virtuous. (How many self-denying mothers does it take to change a lightbulb? None: I’ll just sit here in the dark.) The good for a transcendent purpose is the faith, hope, and love to pursue an answer to the question “So what?” The family, science, art, the football club, God give the answers that humans seek. The middle level is attention to the good for others. The late first-century BCE Jewish sage Hillel of Babylon put it negatively yet reflexively: “Do not do unto others what you would not want done unto yourself.” It’s masculine, a guy-liberalism, a gospel of justice, roughly the so-called Non-Aggression Axiom as articulated by libertarians since the word “libertarian” was redirected in the 1950s to a (then) right-wing liberalism. Matt Kibbe puts it well in the title of his 2014 best seller, Don’t Hurt People and Don’t Take Their Stuff: A Libertarian Manifesto.2 On the other hand, the early first-century CE Jewish sage Jesus of Nazareth put it positively: “Do unto others as you would have them do unto you.” It’s gal-liberalism, a gospel of love, placing upon us an ethical responsibility to do more than pass by on the other side. Be a good Samaritan. Be nice. In

condemn. His analysis of equality as a moral principle, his “fairness objection,” does not get beyond the schoolyard taunt that such-and-such is “not fair.” Yet if charging tolls on congested highways is “unfair to commuters of modest means” (in Sandel’s repeated formulation of the first principle), what is to stop society from concluding that charging for bread and housing and clothing and cable TV and Fritos is “unfair”?7 Nothing. The society ends in full-blown statism, a modern leviathan. The unanalyzed dictum that it’s “unfair” that Carden does not have his own 5,000-square-foot supersuite at the Bellagio in Las Vegas (he really does find it troubling) would slip down to allocation by state direction by the Communist or Nazi Party for everything. Byelorussia.

Thus, it is suggested, a deeper understanding of the conditions affecting the speed and ultimate extent of an innovation's diffusion is to be obtained only by explicitly analyzing the specific choice of technique problem which its advent would have presented to objectively dissimilar members of the relevant (historical) population of potential adopters.

Human capital is of course much more equally distributed than ownership of factories or ships. We own ourselves, even if we are poor in stocks and bonds. Focusing on financial wealth is therefore misleading.

The cry for more education, by the way, is often a despairing excuse for not liberalizing the economy directly and quickly.

book of 2000 by Craig Gay (With Liberty and Justice for Whom?: The Recent Evangelical Debate over Capitalism), which showed that evangelical Christians on the left took wealth as given, manna, and “hence applied their Christian/Biblical principles only to the problem of (static) distribution, whereas the evangelicals on the right emphasized incentives to the ongoing creation of wealth, innovation, etc.”8

If we seized all the assets of the eighty-five wealthiest people in the world to make a fund to give annually to the poorest half, it would raise their spending power by less than 10 cents a day.

happiness is not a six-pack and a sport utility vehicle but what he calls “flow.” It occurs “when a person’s skills are fully involved in overcoming a challenge that is just about manageable” (Csikszentmihalyi 1997, 30).

(The word “clerisy,” which I’ll use often, is of German origin, and is how Samuel Taylor Coleridge and I refer to the intelligentsia, journalists, ministers, professors, novelists, and the rest of the scribbling tribe.)

the liberal plan,” as old Adam Smith wrote in 1776, “of [social] equality, [economic] liberty and [legal] justice,” with a modest, restrained government giving real help to the poor.1 True modern liberalism.

the monopoly of coercion, such as the public protection of slave capital in the United States before the Civil War—get capitalized into the prices of the assets to which they are attached.

Taxation supports the spy, encourages the faction, dictates the content of newspapers.”9 In 1792 even in a quasi-liberal Britain the government owned secretly over half of the newspapers.10 As Boudreaux wrote recently, “The only sure means of keeping money out of politics is to keep politics out of money.”11 Small government. The bumper sticker on my little Smart car read, “Separation of Economy and Government.” We

Yet in fact when the Party adopted economic liberalism, and ceased killing growth by killing businesspeople, real income for the poorest started doubling every seven to ten years. India has the same story, after 1991, following forty-four wretched years of Gandhian socialism and egalitarianism resulting in poor-people-neglecting rates of growth—at which it would take seven decades, not one, to double.

Humanomics doesn’t give up on science. On the contrary, it yields the best scientific explanation of how we got rich, 1800 to the present, and how the whole world soon will, and it gives us, too, a reason to be good.

The great (American-definition) liberal Lionel Trilling wrote in 1948 that “we must be aware of the dangers that lie in our most generous wishes,” because “when once we have made our fellowmen the objects of our enlightened interest [we] go on to make them the objects of our pity, then of our wisdom, ultimately of our coercion.”18 Every mother knows the dangers. And when she loves the beloved for the beloved’s own sake, she resists them.

The liberal economist and political philosopher Hayek argued in “Why I Am Not a Conservative” that both conservatives and socialists believe, with most lawyers and soldiers and bureaucrats, that “order [is] . . . the result of the continuous attention of authority.”1 In a word, they advocate statism. The extravagant modern growth of law as legislation, to be contrasted with the older notion of law as the discovered good or bad customs of our community, embodies such a belief.

The implementation of liberty/freedom, as Robert Hayden, the U.S. poet laureate in the 1970s, put it, has been the “way we journeyed from Can’t to Can.

By contrast, keep on with various versions of old-fashioned monarchy, or with slow or fast socialism, with its betterment-killing policies protecting the favored classes, especially the rich or the Party or the cousins, Bad King John or Robin Hood—in its worst forms a military socialism or a tribal tyranny, and even in its best a stifling regulation of new cancer drugs—and you get the grinding routine of human tyranny and poverty, with their attendant crushing of the human spirit. The agenda of modern liberalism, ranged against tyranny and poverty, is achieving human flourishing in the way it has always been achieved. Let my people go. Let ordinary people have a go. Stop pushing people around.

Max Weber, for example, made the mistake. He imagined that the Protestant ethic encouraged hard work and high saving, instancing Benjamin Franklin. Weber didn’t get the joke about Father Abraham and a penny saved (few have, actually). Franklin’s special gift was not working hard—which hard work, after all, the peasant planting rice does daily. His gift was innovation, at a frenetic rate, for which he was honored and required no patents for—his stove, bifocals, battery, street lighting, postal sorting shelves, the lightning rod, the flexible catheter, the glass harmonica, a map of the Gulf Stream, and the theory of electricity.

The bourgeois (which is merely the usual French and for a while the usual English word for the urban men of the middle class) were the innovators willing to subject their ideas to the democratic test of a market, and to supply Paris with grain and iron.

The clerisy imagined in the nineteenth century nationalism, socialism, imperialism, and racism. Such theories resulted during the twentieth century in actually existing socialism and nationalism and national-socialist-racist imperialism, and the butcher bill for them all. In the late twentieth century the clerisy turned its hand to theorizing evil consumerism and environmental decay. Uh-oh. Watch out, dears, for fresh results in the twenty-first century.

People often resent the dealers. But in the end they prefer them to thugs or thieves.

In all practically relevant cases, governments—or more accurately the individuals involved in governmental process—do possess the power to coerce.

It’s symmetrical, left and right, because both the Dems and the GOP, Labour and the Tories, want the government to be really, really big, without regard to free choice, and to follow majoritarian opinion really, really closely, without regard to minorities. We Modern True Liberals stand against them both, opposing the tyranny of the majority on either side of the usual spectrum. Hip, hip, hurray for Smith, Wollstonecraft, Thoreau, Bastiat, Mill and their descendants.

The forces that will drive the whole world to become rich are temperate self-interest and temperate governance. As Adam Smith put it in 1755, “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things.

But what gives human love its special poignancy, and gives human justice its special dignity, is the limit to life.

The left in its worrying routinely forgets this most important secular event since the invention of agriculture—the Great Enrichment of the last two centuries—and goes on worrying and worrying, like the little dog worrying about his bone in the Travelers Insurance advertisement on TV, in a new version every half generation or so.

A recognition of the impossibility of exact perfection lay behind the work of a few economists, such as Herbert Simon’s satisficing, Ronald Coase’s transaction costs, George Shackle’s and Israel Kirzner’s reaffirmation of the old Yogi Berra jest: it’s hard to predict, especially about the future.

As Raymond Aron, that rarest of things, a modern French liberal, noted, in Clive James’s translation, “the liberal believes in the permanence of humanity’s imperfection; he resigns himself to a régime in which the good will be the result of numberless actions, and never the result of conscious choice.”10 You could call it the invisible hand, noting that it is true also of other systems, such as language.

What the economist and historian Deirdre N. McCloskey calls the Great Enrichment began in seventeenth-century Holland, gathered steam—literally—in eighteenth-century Britain and the American colonies. Although agriculture was invented about 11,000 years ago, it took 4,000 years for it to supplant hunting and gathering as mankind’s main source of food. This made possible the rise of cities, which involved transactions that led to the development of writing about 5,000 years ago and mathematics about 4,000 years ago. But modernity means velocity. It took 4,000 years for mankind to adapt harnesses to the long necks of horses. But just sixty-six years after the Wright brothers’ first flight, which covered a distance shorter than the wingspan of a Boeing 747, a man walked on the moon.

Bourgeoisie Dignity, Deirdre McCloskey, economista de la Universidad de Illinois,

Deirdre McCloskey.

people test their inventions in the marketplace. An innovation, therefore, is a market-successful (or, to use Deirdre McCloskey’s term, “trade-tested”) invention. This distinction between invention and innovation is imperative. People invent a lot of things, many of which are useless or even harmful.