Bourgeois Dignity As the Source of Economic Growth: Deirdre McCloskey's Vision

Revolutionary turn in explaining the root causes of transition to accelerated and sustainable economic growth took place in the book Bourgeois Dignity: Why Economics Can’t Explain the Modern World? written by a dissident economist from USA, Deirdre McCloskey.

The cause of the “Rise of the West” according to McCloskey, as famous economist Peter Boettke wrote in his review of the book in 2010, was “widespread and significant shift in public opinion about the life and activities of the bourgeoisie.” What was this shift? Something happened, that McCloskey calls the “Bourgeois Revaluation:” “Double ethical change, giving dignity and freedom to ordinary bourgeois life, led to a reign of sense and sensibility, thanks to which we still benefit.”

True to the rhetorical approach, McCloskey called the chapter about what changed the world very simply: It Was Words. A radical change in public talks, reflecting a shift in dominant ideas and public opinion, became crucial. “Changes in the rhetoric spawned a revolution in how people see themselves and how they see the middle class, the Bourgeois Revaluation. People became tolerant to the markets and innovation.” When in the eyes of society to be “bourgeois” became not a shameful, but rather worthy and honorable, the start of the industrial revolution and modern economic growth was given.

When dignity and freedom take shape, it generates innovation. One of the chapters of Bourgeois Dignity is even called Liberal Ideas Caused the Innovation. “The idea of dignified and free bourgeoisie led to the ideas of the steam engine, mass distribution and democracy.” And people became tolerant to the markets and innovation. At the same time, it is innovation, rather than simply increasing industrial investment, that is critical for economic growth. And, accordingly, lead to “Great Enrichment.”

In the end, relying on the above-mentioned judgments of McCloskey, we will try to represent schematically her vision of deployment of a chain of events leading from two millennia of stagnation to the present:

Rhetoric defending bourgeois dignity ⇒ Freedom from government intervention ⇒ Innovation ⇒ “Great Enrichment”

It all starts with a radical change in the rhetoric in which one hero (warrior and aristocrat) is replaced by the other (bourgeois with his commerce). Finding a decent appearance in public opinion, this new hero seeks freedom, placing the state in the narrow bounds of service in the name of providing general assurances of economic life. This creates conditions for the flow of innovation, bringing sustainable economic growth and, as a consequence, generating previously unimaginable level of mass prosperity (“Great Enrichment”).