Bourgeois Dignity‘s line of inquiry — at least as stated — is into the causes of what Deirdre McCloskey calls “the Fact” — the tenfold or more increase in the average person’s standard of living in a couple centuries’ time.

Her thesis that “the Fact” owed its origins to a culture of innovation, of openness to experimentation and tinkering, and respect for productive labor, is — to be fair — quite persuasive, as such. The problem lies with the rather incoherent way she groups all the things together that she identifies with this culture, and the assortment of things she considers inimical to it.

Her actual argumentation, to put it nicely, is somewhat muddled. What she’s actually engaged in an apologetic for seems to be an unstable amalgamation of everything she has an aesthetic affinity for, and varies from place to place in the book. But for the most part, the view of the world she’s advancing is that of Postrel’s The Future and Its Enemies, but with more footnotes.

For example, she conflates an amazing list of things in the post-1848 “elite” opinion that shifted against innovation and technological progress: “in nationalism and then in socialism, and then in national socialism, and finally in environmentalism…” And this amalgamated body of “elite” opinion was characterized by this rigorously defined list of traits: “stubbornly anti-capitalist, protectionist, anti-technological, allied with anti-Americanism.” Her concept of what constitutes “elites,” incidentally, seems to contain no small amount of Babbitry, roughly coinciding with the Republican Party’s understanding of “coastal elites” as people with snotty cultural attitudes — as opposed to regular fellows who don’t know what fork to use, despite being billionaires, CEOs and similar figures who have (you know) actual wealth and power. She literally presents the Readers Digest as the embodiment of “non-elite” — and hence “anti-socialist” — opinion. The “bourgeoisie” is by definition non-elite, even when its wealth is measured in billions and a few hundred of its members own most of the world’s wealth, whereas the “elite” consists entirely of intellectual lotus-eaters like the Romantic poets and Marxist professors.

At the outset she stipulates that she’s not defending markets as such, or capitalism as such, but bourgeois values centered on innovation, dynamism, entrepreneurship, etc. It is these ideas, she says, and the forward-thinking attitudes they reflect — not material factors like accumulation — that are responsible for the Fact. Material factors can explain second-order phenomena like why the benefits of growth from the Fact are distributed among members of a given society, or why the advance in average material standard of living was a bit faster here and a bit slower there. But the Fact, as such, results from cultural attitudes toward entrepreneurship and innovation.

But it’s not clear who she thinks she’s arguing against in promoting this thesis, other than perhaps John Zerzan or John Michael Greer and his disciples. Marx was second to none in celebrating the unprecedented forces of production unleashed by industrial capitalism in its “rule of scarce one hundred years,” and socialists in general are quite willing to admit the astonishing, unprecedented rate of technological progress and productivity growth in the modern era. They simply argue that capitalism distributed the gains in a very unequal way, and that increasingly irrational social relations of production are impeding further such growth. 

And — getting back to the material factors she herself acknowledged affecting the actual distribution of gains — it’s simply indisputable that assorted forms of artificial property rights and rent extraction have shifted the bulk of the material gains to the upper stratum of society. Leaving aside the lingering structure of ownership resulting from Enclosures and other robberies of the early capitalist period, and the separation of labor from its possessory rights in the means of subsistence, the bulk of corporate profits and billionaire wealth to this day results from economic rents of one kind or another.

True, McCloskey denies that primitive accumulation (in the Marxian sense) was responsible for the Fact; but that’s really tangential to the actual significance of primitive accumulation in radical historiography. What figures most prominently in radical historiography of the enclosures (both the lowercase kind of the late Medieval and early modern era that turned open fields into sheep pasture, and the uppercase Parliamentary kind on the eve of the Industrial Revolution) is their role in establishing the wage system and facilitating the extraction of surplus value — not in facilitating the technological takeoff as such. And primitive accumulation played a huge role in creating the structural power differentials and inequality of bargaining power that determined how the fruits of increased productivity were distributed. The latter association would be a much more important thing — and a much harder one! — to disprove, for capitalist apologetic purposes.

One thing McCloskey deserves credit for is minimizing the role of capital accumulation as such as a driver of increased productivity and wealth — a position which sets her apart from an endless amount of dreck that appears almost daily at right-libertarian websites. I will readily admit, and cheerfully so, that orthodox Marxists are wrong in their degree of emphasis on the scale of capital accumulation as a source of productivity — an emphasis they share not only with the Austrians but with liberal mass-production ideologues like John Kenneth Galbraith and Alfred Chandler. Mumford, Kropotkin, and Borsodi are much closer to the truth, as I have argued repeatedly in my own treatment of technological history. 

Enclosures and other forms of primitive accumulation were far less important as a source of investment capital for the industrial revolution than as a source for the power differentials that enable extraction of a surplus from labor. “[M]odern economic growth did not and does not and cannot depend on the scraps to be gained by stealing from poor people.” No; but the distribution of the fruits of economic growth between classes can, did, and does depend on the bargaining leverage gained by depriving poor people of direct access to the means of production and subsistence. Primitive accumulation may not have been the reason for the growth of the pie, but it is very much the reason the rich get such a giant share of it.

“Stealing from poor people is not a good business plan.” Actually it is. It may not be a good plan for accumulating initial investment capital, but it is an excellent plan for shifting the balance of power in order to steal a major part of the future output of those poor people and their descendants when you employ them. 

McCloskey herself at one point argues that human capital is a bigger source of productivity than accumulated investment capital. Yes! And the relative bargaining power of workers and employers determines how much of the output generated by that human capital goes to whom. Apparently she is unfamiliar with all the political economists, from Wakefield to Oppenheimer, who have argued that it is much harder to exploit labor when you have to compete with the possibility of self-employment — or the public polemics and private commentary of the propertied classes of England during the Enclosures, in which they argued that rural laborers would not work for wages as long, as hard, or as cheaply, as desired so long as they had the alternative of subsisting on the commons. The Enclosures may not have been a large source of initial investment capital, but they were vital to creating the defining institutional feature of capitalism: the existence of a propertyless class forced to sell its labor on terms offered by owners of the means of production.

Similarly, she argues that imperalism, slavery, and Apartheid did not benefit the average European, white American, or white South African in the sense of promoting the overall wealth of the country or the rate of growth. But despite her constant — and irrelevant — insistence that it didn’t benefit imperialist countries “as a whole,” she does admit that it benefited a small minority of rich people who directly profited from it. And again, it’s the surplus extraction function (the size of the exploiter’s slice), and not the growth function (the size of the pie), that’s most relevant to a critical analysis of capitalism. 

This is directly analogous, as an example of failure to understand power issues, to right-libertarian arguments that racist employers are irrational because they limit their own ability to hire the most productive workers without regard to race — thus ignoring the role of labor market segmentation, as explained by Harry Braverman and others, in weakening labor solidarity and increasing the ease of exploitation. 

Such is the argument, similarly, of capitalist commentators who argue that mercantilism, the Corn Laws, slavery, etc., were finally ended because people “understood” better — and not because they were no longer useful to the minority that had previously benefited from them. In referring to this or that extractive policy as a “failure,” without specifying clearly for whom it was a “failure,” McCloskey reveals her own failure to grasp class analysis, or what constitutes “success” or “failure” from the perspective of a ruling class.

Right-libertarians, in general, are very bad at understanding the class power implications, or benefits to wealth extraction, of the things they dismiss on the grounds of seeming “economic irrationality.”

Moving on, she argues that the Price Revolution of the Sixteenth Century did not “cause the industrial revolution.” But it did shape the subsequent institutional structure of capitalism, and the rate of extraction of surplus labor. Specifically, the commodification of land, the abrogation of communal rights in the open fields and common pasture, the conversion of peasants to tenants at will, and the mass waves of rack-renting and eviction, were central in transforming the peasantry into a landless rural proletariat, and in creating the structure of the wage labor market against which background the Industrial Revolution took place. So McCloskey’s asking the wrong questions.

And she repeatedly makes it clear that, her disavowals notwithstanding, her enthusiasm is not just for innovativeness as such but for the specific model of “free market capitalism” [sic] that emerged in the early modern West. Moreover, the specific things she sees as impeding the innovation and dynamism she supports are, primarily, deviations from the neoliberal model. Take, for example, her reference to “unhelpful economic policies (such as South-African labor laws based on German models and supported by leftist ideologues and trade unionists eager to give the really poor corrupting handouts to keep them away from the job market).” What inherent connection is there between a culture of innovation, as such, and an institutional framework in which labor is rendered so precarious and powerless as to be forced to enter the job market and accept work on whatever terms are offered by capitalists? Why are “handouts” “corrupting” for labor, when the plutocracy’s income comes primarily from economic rents on artificial property rights and artificial scarcities enforced by the state, or from state subsidies? The incentives to productivity would be much greater, arguably, given an institutional and property structure in which income was tied more closely to actual productivity (e.g., an economy of commons-based natural resource governance, free and open-source knowledge, and stakeholder cooperative governance of the firm). If anything is corrupting, it’s the ability of cowboy CEOs to expropriate workers’ contribution to productivity, via Hayekian distributed knowledge, in the form of executive compensation.

This is, please note, the same person who repeatedly stresses the relative unimportance of “institutions” and “incentives” compared to cultural attitudes towards innovation. Apparently that flies out the window when it comes to institutions that increase the precarity of labor and reduce its bargaining power, presenting it with the incentive to accept work on whatever terms are offered. And apparently economic security or robust bargaining rights — let alone actually vesting decisions about product and process innovation in workers rather than shareholders — are inconsistent with a culture of innovation. Growth may result from technological advancement and the culture of innovation that fosters it, but apparently giving a greater degree of control over production to the very people who are most directly familiar with the production process is somehow at odds with such innovation.

Either material and institutional factors are important, or they are not. McCloskey says they are not, but rather than setting them aside, she instead smuggles them in disguised as “cultural” matters.

McCloskey also minimizes the extent to which the “free market” model she celebrates was no such thing, but was imposed by state force (she’s also one of the leading voices in challenging the 1619 Project’s emphasis on the role of slavery in the development of American capitalism). So she has little in the way of coherent criteria for defining the core features of such economies, directly responsible for the Fact, from the accidental ones. Given her negative views of trade unionism and handouts, presumably she regards the predominance of the wage system and more specifically what the Washington Consensus euphemistically calls “labor mobility” or “labor flexibility” as among the positives, and essential to some degree to the Fact’s occurrence. But in fact these things were brought about through all the forms of institutionalized violence she dismisses as unimportant to the Fact.

It’s ironic that she points to Soviet planners’ treatment of capital inputs as a “free good” as an example of calculational chaos, when capitalism has for centuries pursued a growth model of treating enclosed land and natural resources, and state-subsidized material inputs like transportation and trained labor-power, as artificially cheap and abundant goods. And, on the other hand, following a profit model overwhelmingly focused on economic rents from artificial scarcity of information.

Also ironic is the fact that the closest real embodiment of her bourgeois ethos of innovation and the dignity of tinkering in present-day society are the open-source peer-producers and open hardware hackers creating means of production scaled to commons-based direct production for use in the informal and social economy, or even the engineers who actually came up with all the ideas Elon Musk profits from. As I have argued elsewhere, the role of the “entrepreneurs” and “investors” McCloskey lionizes as the heroes of innovation is largely extractive and parasitic, based on the enclosure of actual innovative labor as a source of rents. The real innovation comes from the social intellect and cooperative labor of the very people whose unions and bargaining power she sees as a barrier to innovation.

Likewise, the related fact that the most significant form of central planning in the world is that of the large transnational corporation which encloses those same innovators and tinkerers within its walls of intellectual property for the benefit of people like Elon Musk, who are every bit as parasitic as any aristocrat living off the labor of peasants on his estate.

A good example of her misplaced regard for such people: “If you personally wish to grow a little rich, by all means be thrifty, and thereby accumulate for retirement. But a much better bet is to have a good idea and be the first to invest in it.” With its assumption that the people who have the ideas that increase productivity are the ones who get rich from them, or that vulture capitalists play some indispensable role, this could be a line from a John Stossel or Thomas Sowell column.

But it’s entirely fair to say that not one of the ideas that constitute Tesla or Amazon, nor the ideas for how they were combined, actually came from Musk or Bezos. All the basic building block concepts already existed, all the improvements in their existing implementations came from engineers and workers, and there was nothing that ground-breaking in the way they were put together. The only thing supplied by Musk and Bezos was the capital to prime the pump, as I argued in the article linked above. 

The irony is that McCloskey herself argues for Schumpeterian “credit theories of money” against the importance of capitalist thrift and abstention as a source of accumulation. So she is implicitly conceding, as I argue, that the pump priming function is something that could be carried out entirely as a system of horizontal flows, through cooperative credit, if the function of advancing credit had not been monopolized by capitalist banking institutions with the help of the capitalist state. Hence the parasitism of those who simply parlay a monopoly on the right to supply credit into a property right in the productivity created by other people’s innovation. The status quo, in which Bezos and Musk derive passive income from wealth actually created by the creativity of others, is far more “corrupting” a “handout” than anything McCloskey wrings her hands over in the German industrial model.

So again, it’s far from clear which aspects of actually existing capitalism are integral or essential, and which accidental, to the culture of innovation that McCloskey lionizes. More than anything, she identifies that culture with all the things — never clearly or exhaustively specified — which she likes in the status quo.

In addition to everything else, the book overflows with vulgar libertarian talking points that might have come from PragerU or Turning Point USA:

• Slavery existed everywhere but was only abolished by the West.
• Stagnation of wages in the US is misleading because of technological advances and quality improvement (an argument I tore into here).
• Of course there’s the obligatory reference to Ehrlich’s The Population Bomb as the Malthusian foil for her observation — which might have been lifted word for word from any of a hundred Ron Bailey columns at Reason — that things are getting better and better. At least she doesn’t repeat the thing about Rachel Carson and malaria.
• Or this, God help us: “Private property is not optional, and market socialism is a contradiction in terms.”

(I should note that, believe it or not, I rewrote my original draft to be a bit less snarky and mean-spirited. Professor McCloskey seems to be delightful as a person; considering Phil Magness is the other major figure in the anti-1619 project, I guess she deserves credit for not being awful.)

So this book is pretty decent at demonstrating the thing McCloskey ostensibly sets out to prove, but quite atrocious at proving all the tangentially related assertions — incidentally the ones more likely to make the hearts of capitalist apologists go pitty pat — she makes along the way. In fact, the material that advances her actual thesis goes a long way towards making a case for libertarian socialism as well.