Thursday, June 02, 2011

McCloskey Champions Bourgeois Virtues

Dierdre McCloskey Bourgeois Virtues is a nice defense of capitalism. 50 or 100 years ago, 'burgeois' was an epithet, implying someone is shallow, base, selfish. As many (most?) political differences come from whether one thinks that the market or government rewards virtue more, it's good to understand whether there is any evidence to this question. A good businessman is, ironically to many, a good person: friendly, agreeable, disciplined, honest, etc. Not always to be sure--I know many petty, paranoid hedge fund people--but the things we like most about our friends and neighbors are generally attributes that make one a better salesman or manager. To me, the market is superior not because it's perfect, but because competition within a framework of repeated interactions motivates people to be better men and women; government officials can persist with perverse policies and simply never have to learn, always blaming their bad results on insufficient resources.

I remember when McCloskey became a transsexual because she was then a well-known and quirky economic historian. He has always been advocating the importance of economic history, having written the widely read 'Does the Past have Useful Economics?' in 1976. Indeed, ubertheorist Paul A Samuelson had a late revelation when he noted a new appreciation in 2009:
Have a very healthy respect for the study of economic history, because that’s the raw material out of which any of your conjectures or testings will come. And I think the recent period has illustrated that.
The data are much richer than the seemingly precise post WW2 National Income and Product Accounts data; for example, a history of the 19th century highlights that financial crises and business cycles are intrinsically linked, and that growth does not need large amounts of government spending.

Anyway, she now writes a lot about the morality of markets, and makes a strong case for why burgeois values have historically been much maligned, but are in fact a key to modern, prosperous, liberal, societies.

Ernest Hemingway is supposed to have pointed out to Scott Fitzgerald that the rich were not really different except in having more money. McCloskey makes a similar observation about those with less: “The poor are not better than you and me. They’re just poorer.” I would go further, noting the poor are more impulsive, not as educated or intelligent, and this is why on average they are relatively poor. But, you can't be taken seriously by legitimate audiences if you say that, instead, you have to tell people it's something else: insufficient or incompetent government, bigotry, class oppression, etc. McCloskey takes a baby step, by saying poverty is not the fault of the rich.

McCloskey argues for seven traditional virtues—courage, justice, temperance, prudence, faith, hope, and love. I think justice, temperance, faith, and hope, are all really parts of prudence, because these values are seen as virtuous precisely because they are salutary--they are efficient means to our ultimate end of a happy and fulfilling life, thus all merely prudent. Anyway, such virtues always exist in moderation, none sufficient, all necessary.

It's essential to recognize that many of the most evil people who have every existed have some virtues, but because they were unbalanced, created nightmares. One could look at the 9/11 suicide squad and acknowledge their courage--something that Bill Mahrer was scolded for saying. Indeed, GW Bush felt obligated to call the Al Quaida killers 'cowardly', as if implying that a bad person must be bad in every way, which is simply untrue. As McCloskey says, hope is a virtue, certainly, but “when unbalanced by the other virtues, it produces evil, such as revolutionary socialism or revolutionary fascism.” Hitler had hope and possessed “personal courage beyond doubt,” but, McCloskey notes, he lacked “temperance and justice and prudence,” which is sufficient for him to be rightly considered the most repugnant person in human history. I would think it not possible to do great harm without having some virtues that make one's programs attractive to the many willing executioners needed, because people don't do evil thinking it's evil, but rather, the think they are accelerating the emergence of the good.

It's useful to look at history, or the areas where Big Box retailers can't or won't go (Detroit, Zimbabwe, North Korea), so see that the bourgeois aren't the disease but the cure. Against modern progressives who yearn for the alleged warmth and community of previous non-commercial culture she notes “the murder rate in villages in the thirteenth century, to take the English case, was higher than comparable places now.” And further it was the bourgeoisie that “ended slavery and emancipated women and founded universities and rebuilt churches, none of these for material profit and none by damaging the rest of the world.” In the long view, it has been the “bourgeois virtues [that] led us from terrified hunter bands and violent agricultural villages to peaceful suburbs and lively cities.” In traditional societies where outsiders are enemies, “one makes friends to keep from being assaulted,” while in societies where relations between individuals are governed by the infamous “cash nexus.”

When the barista says 'thank you' for buying coffee, and I say 'thank you' back, we have a double thank you moment, symptomatic of positive gains from trade. In contrast, I don't say 'thank you' when I pay my taxes, and the government doesn't say 'thanks' to me either.


Anonymous said...

Aren't your examples of reciprocal behaviour more a matter of scale than market?

Sure I don't say "thank you" when I pay my taxes, but I don't say "thank you" when I pay my phone bill either, and I do say "thank you" at the post office and I used to at the kids' school.

In the spirit of bourgeois virtue, I'll refrain from comment on your "why they are poorer" sentence.

Martin said...

In places with a reasonable level of economic freedom I agree that personal traits of the poor is an important factor for explaining why they are poor.

However, in the large part of the world where economic freedom is curtailed by authoritarian, or democratic but corrupt and/or socialist governments there are tons of intelligent and non-impulsive people that are poor.

Most of North Korea's population would fit in here, and hundred of millions of poor chinese who would probably have been rich if Chiang Kai Chek won the civil war and China had skipped the whole communism thing.

If poverty is looked on an absolute scale I'd say the people that are poor because of living in a place with low economic freedom (or low in the recent past) greatly outnumber those that are poor because of personal characteristics.

Todd said...

Who are these "modern progressives who yearn for the alleged warmth and community of previous non-commercial culture"??

I'm a progressive with an abiding respect for bourgeois values. And while I do make an effort to support the local shopkeepers (see France and it's nation of shopkeepers), I've never yearned for a "previous non-commercial culture".

If anything, the progessives in my progressive community demonstrate respect for these bourgeois values by supporting the local shopkeepers and farmers, not just their product. Why does that seem to get up your nose?

Mercury said...

'Bourgeois' was (is?) an epithet because Marx made it one. He also essentially invented the term 'capitalism' as a straw man to knock down - so I'm sometimes hesitant to defend 'capitalism' before the term is defined, preferring to focus instead on free enterprise. I would say that all 'developed' economies today are capitalist in the sense that they are driven/dominated by abstract representations of capital - something that probably first came to be in the Medici era.

Eric Falkenstein said...

Todd: The preference towards 'small scale' produce, as opposed to corporations, is what I'm getting at...clearly you are correct that progressives admire small firms, the anarcho-syndicalist vision...but Target, Wal-Mart, etc., I think are good things, not bad, and much more honest and less bigoted than small shopkeepers because such vices don't scale well

Todd said...

Eric--when you were championing "bourgeois values", I assumed you were referring to the small shopkeepers and small-scale capitalists, not to Big Box shareholder capitalism with it's professional managers and wage laborers.

I've never heard the term applied to Walmart, Target, Home Depot, or Safeway. But perhaps you can enlighten me.

BTW, just because I chose to spend my money at the local paint store doesn't mean I think Home Depot is "bad" nor does it make me an anarcho-syndicalist...