An excerpt from
The Bourgeois Virtues
Ethics for an Age of Commerce
Deirdre N. McCloskey
Modern Capitalism Improves Our Ethics
If we had gained a better material world, two cars in the garage and Chicago-style, deep-dish, stuffed-spinach pizza on the table, but had thereby lost our souls, I personally would have no enthusiasm for the achievement. I urge you to adopt the same attitude. A good name is rather to be chosen than great riches. For what is a man profited, if he shall gain the whole world, and lose his own soul?
I do not want to rest the case for capitalism, as some of my fellow economists feel professionally obligated to do, on the material achievement alone. My apology attests to the bourgeois virtues. I want you to come to believe with me that they have been the causes and consequences of modern economic growth and of modern political freedom.
True, any well-wisher of humankind will count the relief of poverty over large parts of the world as desirable, at least if she could be sure that no excess corruption of souls was involved. No good person delights in the misery of others. Even many people skeptical of a Washington consensus of neoliberal capitalism agree that globalization has been desirable materially. It has, as one of the skeptics, Joseph Stiglitz, wrote in 2002, “helped hundreds of millions of people attain higher standards of living, beyond what they, or most economists, thought imaginable but a short while ago.”
He means bringing the 1.3 billion people—70 percent of them women—now living on a dollar a day to two dollars, and then to four, and then to eight, not merely the further enrichment of the West, which neither he nor I regard as especially important. “The capitalist achievement,” wrote Joseph Schumpeter in 1942, “does not typically consist in providing more silk stockings for queens.” That can be achieved merely by redirecting aristocratic plundering to silk factories. The achievement consists “in bringing [silk stockings] within the reach of factory girls in return for steadily diminishing amounts of effort.”
To halt such a good thing, as some of the Seattle-style opponents think they wish, would be according to Stiglitz “a tragedy for all of us, and especially for the billions who might otherwise have benefited.” The economist Charles Calomiris, who supports globalization on egalitarian grounds, as I do, argues that “if well-intentioned protestors could be convinced that reversing globalization would harm the world’s poorest residents (as it surely would) some (perhaps many) of the protestors would change their minds.” One would hope so.
But fattening up the people, or providing them with inexpensive silk stockings, I will try to persuade you, is not the only virtue of our bourgeois life. The triple revolutions of the past two centuries in politics, population, and prosperity are connected. They have had a cause and a consequence, I claim, in ethically better people. I said “better.” Capitalism has not corrupted our souls. It has improved them.
I realize that such optimism is not widely credited. It makes the clerisy uneasy to be told that they are better people for having the scope of a modern and bourgeois life. They quite understandably want to honor their poor ancestors in the Italy of old or their poor cousins in India now, and feel impelled to claim with anguish as they sip their caramel macchiato grande that their prosperity comes at a terrible ethical cost.
On the political left it has been commonplace for the past century and a half to charge that modern, industrial people, whether fat or lean, are alienated, rootless, angst-ridden, superficial, materialistic; and that it is precisely participation in markets which has made them so. Gradually, I have noted, the right and the middle have come to accept the charge. Some sociologists, both progressive and conservative, embrace it, lamenting the decline of organic solidarity. By the early twenty-first century some on the right have schooled themselves to reply to the charge with a sneering cynicism, “Yeah, sure. Markets have no morals. So what? Greed is good. Bring on the pizza.”
The truth I claim is closer to the opposite. In his recent book on the intellectual history of modern capitalism Jerry Muller notes that “the market was most frequently attacked by those who viewed its intrinsic purposelessness as leading to an intrinsic purposelessness in human life as such, and who sought radical alternatives on the left and right.” That is indeed what the left and right believed, and still believe. They believe in the cultural critique of capitalism, a critique which once justified the Arts and Crafts movement and socialist realism on the left and the architecture and poetry of fascism on the right, and justifies now sneering at red states by blue.
I say that the cultural critique is mistaken. Production and consumption, to be sure, are “intrinsically purposeless.” Mere eating is not a “purpose” in the sense that people mean the word as a commendation. But this is true of any production and consumption, in any economy imaginable, in a medieval or pastoral utopia as much as in actually existing socialism or capitalism.
Humans make their consumption meaningful, as in the meal you share with a friend or the picture frame in which you put the snapshot of your beloved. It is not obvious that consuming in Midtown Manhattan is less purposeful than consuming in an anticapitalist North Korea or in an antibourgeois hippie commune. Isn’t it more purposeful, speaking of the transcendent? The grim single-mindedness of getting and spending in a collectivist village is not obviously superior to the numberless levels, varieties, and capacities of Paris or Chicago. Vulgar devotion to consumption alone is more characteristic of pre- and anticapitalist than of late-capitalist societies.
I claim that actually existing capitalism, not the collectivisms of the left or of the right, has reached beyond mere consumption, producing the best art and the best people. People have purposes. A capitalist economy gives them scope to try them out. Go to an American Kennel Club show, or an antique show, or a square-dancing convention, or to a gathering of the many millions of American birdwatchers, and you’ll find people of no social pretensions passionately engaged. Yes, some people watch more than four hours of TV a day. Yes, some people engage in corrupting purchases. But they are no worse than their ancestors, and on average better.
Their ancestors, like yours and mine, were wretchedly poor, engaged with getting a bare sufficiency. It does not have to be that old way. In 1807 Coleridge quoted an economist of the time, Patrick Colquhoun, asserting that “poverty is . . . a most necessary . . . ingredient in society, without which nations . . . would not exist in a state of civilization. . . . Without poverty there would be no labor, and without labor no riches, no refinement.” This was a standard argument against the relief of poverty, joining eight other ancient arguments against doing something about poverty—the eight are a recent count by the philosopher Samuel Fleischacker.
Coleridge sharply disagreed with Colquhoun’s pessimism. A man is poor, he wrote, “whose bare wants cannot be supplied without such unceasing bodily labor from the hour of waking to that of sleeping, as precludes all improvement of mind—and makes the intellectual faculties to the majority of mankind as useless as pictures to the blind.” Can such waste be necessary for a high civilization? Coleridge didn’t think so.
In 1807 the debate was still unsettled. Is a class of exploited people necessary for high civilization, as Colquhoun, or Nietzsche, claimed? Or is the disappearance of such a class as a result of material progress exactly how we get a mass high civilization, as Coleridge, or Adam Smith, claimed?
The results are now in. Modern economic growth has led to more, not less, refinement, for hundreds of millions who would otherwise have been poor and ignorant—as were, for example, most of your ancestors and mine. Here are you and I, learnedly discussing the merits and demerits of capitalism. Which of your or my ancestors in 1800 would have had the leisure or education of a Colquhoun or a Coleridge to do that? As the economic historian Robert Fogel noted in 2004, “Today ordinary people have time to enjoy those amenities of life that only the rich could afford in abundance a century ago. These amenities broaden the mind, enrich the soul, and relieve the monotony of much earnwork [Fogel’s term for paid employment]. . . . Today people are increasingly concerned with the meaning of their lives.” He points out that in 1880 the average American spent 80 percent of her income on food, housing, and clothing. Now she spends less than a third. That’s a rise from a residual 20 percent of a very low income spendable on “improvements of mind” to about 70 percent of a much larger income. All right: a lot of it is spent on rap music rather than Mozart, alas; and on silly toys rather than economics courses, unfortunately. But also on book clubs and birdwatching.
Some noble savages have been ripped or enticed from admirable cultures by capitalism. But some ignoble savages, too, have learned a better life free of tribal patriarchy and family violence. You yourself probably have, for example, by comparison with your ancestors of, to put it conservatively, some dozens of generations ago. The cultural relativist claims that one cannot tell whether it is better to be a Tahitian as idealized by Paul Gauguin or a realtor of Zenith as satirized by Sinclair Lewis. I say that idealizations or satires aside, a soul choosing from behind a prenatal veil would opt for bourgeois life now over Tahitian agriculture in 1896. Their mothers and fathers surely would, for their children. Billions have voted this way with their feet.
And whether or not one honors such personal choice, hypothetical or actual, if you adopt an Aristotelian criterion, then most people after capitalism are more fulfilled as humans. They have more lives available. The anthropologist Grant McCracken has written of the “plenitude” that the modern world has brought. He half-seriously instances fifteen ways of being a teenager in North America in 1990: rocker, surfer-skater, b-girls, Goths, punk, hippies, student government, jocks, and on and on. By now the options are even wider. “In the 1950s,” he notes, there were only two categories. “You could be mainstream or James Dean. That was it.” I was there in the 1950s, and agree—though in places like California, richer and fresher than Ontario or Massachusetts in the 1950s, the options were richer, too. The plenitude has come from free people sifting through the cornucopia, making themselves in their music and their clothing.
As the economic historian Eric Jones put it, “There is a tendency to lament the loss of earlier values and practices, however inappropriate they may be for modern circumstances”—think of French village life in Lorraine in 1431 or headhunting Ilongot in the Philippines in 1968—“without allowing for the greater wealth of opportunities and novelties that is continually being created.” Mario Vargas Llosa does not believe that globalization has impoverished the world culturally. On the contrary, Vargas Llosa writes,
globalization extends radically to all citizens of this planet the possibility to construct their individual cultural identities through voluntary action, according to their preferences and intimate motivations. Now, citizens are not always obligated, as in the past and in many places in the present, to respect an identity that traps them in a concentration camp from which there is no escape—the identity that is imposed on them through the language, nation, church, and customs of the place where they were born.
Participation in capitalist markets and bourgeois virtues has civilized the world. It has “civilized” the world in more than one of the word’s root senses, that is, making it “citified,” from the mere increase in a rich population. It has too, I claim, as many eighteenth-century European writers also claimed, made it courteous, that is, “civil.” “The terrestrial paradise,” said Voltaire, “is Paris.”
Richer and more urban people, contrary to what the magazines of opinion sometimes suggest, are less materialistic, less violent, less superficial than poor and rural people. Because people in capitalist countries already possess the material, they are less attached to their possessions than people in poor countries. And because they have more to lose from a society of violence, they resist it.
You can choose to disbelieve if you wish some of the things said to go along with the capitalist revolution of the past two centuries, such as the emerging global village, the rise in literacy, the progress of science, the new rule of law, the fall of tyrannies, the growth of majority government, the opening of closed lives, the liberation of women and children, the spread of free institutions, the enrichment of world culture. But if only a few of these alleged consequences were justified, then capitalism itself would be justified. And not by bread alone.
The late Robert Nozick wrote that “what is desired is an organization of society optimal for people who are far less than ideal, optimal also for much better people, and which is such that living under such an organization itself tends to make people better and more ideal.” Nozick and I say it’s capitalism. We say that socialism works only for an impossibly ideal Socialist Man, or a Christian saint, and that socialism tends to make people worse, not better.
The ethical betterment is not achieved, I repeat, at the cost of the remaining poor people. That is a fact to be established. I do not expect you to agree with everything I am saying. If you do, you are not the antibourgeois, anticapitalist, or antiethical reader I am trying to persuade. I need to persuade you that capitalism and bourgeois virtues have been greater forces eliminating poverty than any labor union or welfare program or central plan. We have the eight-hour day mainly because we got rich, and therefore we won’t tolerate eleven-hour days—unless we are yuppie attorneys in New York fresh from Yale Law School making well over $100,000 a year in exchange for a seventy-seven-hour work week. Some poor people now work long hours and can’t make it. No one should deny that. But it was worse in 1900, and worse yet in 1800. Better working conditions have prevailed not because of union negotiations or governmental regulations, but because capitalism has worked.
I need to persuade you also that, contrary to Colquhoun, poverty is not a most necessary ingredient in society. I need to show you empirically, for example, and will try in volume 4, what most economists know: that if the allegedly exploitative trade of the first world with the third were halted tomorrow the first world would suffer a mere hiccup in its rate of growth. I need to show you empirically that if presently poor people in rich countries all became engineers and professors, the presently rich people would be better off, not worse off, though with fewer poor people to bus the tables and mind the children.
We will not have the heaven-on-earth of perfect equality, ever, and I lament this fact. But equality over the long term—despite an unhappy reversal in the trend in the United States in the 1980s—has been increased by capitalism, and in absolute terms the poor even in the 1980s and after got better and better off.
In asserting capitalism’s innocence of causing poverty, understand, I am not simply disrespecting the poor, or elevating material abundance to trumps, or recommending a cold heart. I have emphasized that all our ancestors were poor, that everyone descends overwhelmingly from poor people, even from slaves, since almost all societies before the eighteenth century had lesser or smaller numbers of slaves and all such societies were by your standards and mine astoundingly poor. Try to imagine living on one dollar a day, with the prices of food and clothing and housing as they now are. Imagine, if you wish, an economy with very many such people, and so having commercial provision for mats to sleep hundreds abreast on the streets of Calcutta and for rice-by-the-bowl with pebbles and clay mixed in. It’s still no picnic. Ninety-nine percent of our great-great-great-great grandparents lived on a dollar a day, and more than a billion people I said do still.
I am not disdaining the once and present poor. I am merely repeating what the poor themselves say—that “I been poor and I been rich,” in Sophie Tucker’s words, “and, honey, rich is best,” for stomachs, for brains, for souls. No one in a favella behind the Copacabana thinks her life is made more admirable in a spiritual sense by living in a cardboard box. Only saints and intellectuals can believe such a paradox for longer than it takes the sun to go down over Corcovado. The poor person wants the fruits of capitalism, first the material fruits and then the spiritual fruits. The poor are not better than you and me. They’re just poorer. We bourgeois do not make them better off by being ashamed of being rich, since it’s not our fault that they are poor, and there is therefore no original sin in our being rich. We should instead work to make them rich, too, by spreading the used-up liberal capitalism.
The richer, more urban, more bourgeois people, one person averaged with another, I claim, have larger, not smaller, spiritual lives than their impoverished ancestors of the pastoral. They have more, not fewer, real friends than their great-great-great-great grandparents in “closed-corporate” villages. They have broader, not narrower, choices of identity than the one imposed on them by the country, custom, language, and religion of their birth. They have deeper, not shallower, contacts with the transcendent of art or science or God, and sometimes even of nature, than the superstitious peasants and haunted hunters-gatherers from whom we all descend.
They are better humans—because they in their billions have acquired the scope to become so and because market societies encourage art and science and religion to flourish and because anyway a life in careers and deal making and companies and marketplaces is not the worst life for a full human being. As the economist and philosopher Amartya Sen puts it, “The freedom to exchange words, or goods, or gifts does not need defensive justification in terms of their favorable but distant effects; they are part of the way human beings in society live. . . . We have good reasons to buy and sell, to exchange, and to seek lives that can flourish on the basis of transactions.” He instances the liberation of women worldwide through access to markets.
You need to be careful here. Not all market behavior is good for the soul, and I am not claiming it is. If you listen to Ted Fishman on NPR describing the horrible behavior of his erstwhile colleagues in the options pit at the Chicago Mercantile Exchange you are liable to think, “Ah hah! Thus capitalism and the betterment of human beings!” And that’s right. Fishman says that his mentor at the exchange told him to go after every dollar as though his life depended on it. Not good. Spirit-corrupting.
But the bad things in a capitalist world are not all testimony to the badness of capitalism. Much of human good and evil arises from our fallen natures, and has nothing to do with the circumstances in which we are put. Or to be more exact, it “has to do” with the circumstances, but only in the sense that capitalist circumstances evoke a certain kind of greedy behavior in Ted, while socialist circumstances would evoke in him . . . another kind of greedy behavior. Ted, like you and me, is fallen. This is a crucial point. We must not tolerate bad behavior, anywhere. But we must in our moralizing not mistake human failing for specifically capitalist failing. To attribute every badness to the system is like blaming everything on the weather. It’s not smart or useful.
The Capitalist Man in his worst moments is greedy. And so are you and I. And so, I note, is Socialist Man, in more than his worst moments. If capitalism is to be blamed for systemic evils, then it also is to be given credit for systemic goods, compared not with an imaginary ideal but with actually existing alternatives. The economist Michael Kalecki moved from his good academic position in England back to Poland to help with the imposition of communism there. After some years he was asked about whether Poland had succeeded in abolishing capitalism. “Yes,” he replied. “All we have to do now is to abolish feudalism.”
Capitalism has not corrupted the spirit. On the contrary, had capitalism not enriched the world by a cent nonetheless its bourgeois, antifeudal virtues would have made us better people than in the world we have lost. As a system it has been good for us.
Jonathan Sacks, the chief rabbi of Britain and the British Commonwealth, sometimes repeats the usual claim of religious leaders, unsubstantiated, that “the dominance of the market [has] had a corrosive effect on the social landscape” and that “the institutions of civil society . . . have become seriously eroded in consumption-driven cultures.” He is mistaken. It is a mistake for one thing to think of bourgeois life as “consumption-driven,” if one means that spend, spend, spend is necessary for its survival. An aristocrat or a peasant will spend, spend, spend when he can, yet his life consists of more. So too the bourgeois. Since capitalism took command, the social landscape has been enriched, not eroded, as many modern sociologists have discovered—at any rate those who have looked into the matter rather than accept nineteenth-century German romanticism and twentieth-century Catholic nostalgia.
But Rabbi Sacks gets it right when he tells us “It is the market—the least overtly spiritual of contexts—that delivers a profoundly spiritual message.” What message? “It is through exchange that difference becomes a blessing, not a curse.” This from a man who has given some thought to the costs and benefits of difference. Sacks understands that “the free market is the best means we have yet discovered for alleviating poverty,” yes, but also for “creating a human environment of independence, dignity and creativity.”
Capitalists 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. Bourgeois virtues led us from terrified hunter bands and violent agricultural villages to peaceful suburbs and lively cities. Enlightened people such as Voltaire, Montesquieu, Adam Smith, and Mary Wollstonecraft believed that work and trade enriched people in more than material things. They believed that a capitalism not yet named broke down privileges that had kept men poor and women and children dependent. And for the soul they believed that labor and trade were on the whole good, not dishonorable. Work is “rough toil that dignifies the mind,” wrote Wollstonecraft, as against “the indolent calm that stupefies the good sort of women it sucks in.” Commerce, the French said, was a sweetener: le doux commerce. Commerce may have lowered the spirit of the proud noble, Voltaire noted with little regret, having suffered literal beatings at his behest, but it sweetened and elevated the rude peasant.
Ulysses is an old man in Tennyson’s poem of 1833, about to take ship for one last, heroic adventure. He describes his unheroic, even bourgeois, son Telemachus left to govern Ithaca, “by slow prudence to make mild / A rugged people, and thro’ soft degrees / Subdue them to the useful and the good.” Boring. So inferior to Ulysses’ knightly irresponsibility. Unlike their Romantic successors, the writers of the Enlightenment did not yearn for knighthood and sainthood and peasant solidarity reimagined. “Gothic” in 1733 was a term of contempt, meaning “of the Goths and Vandals,” then descriptive of the Middle Ages, again “chiefly with reprobation.” Only in the nineteenth century did it become a commendation from the Believers in Everything Old like Tennyson and William Morris and John Ruskin. The tradition of the pastoral from Theocritus to Wendell Berry romanticizes rural poverty, viewed from a couch in town.
The bourgeois life rejects the romance of the old and the rural. A good thing, too. Toward the end of the first liberal hour, Tocqueville, who was neither a pastoral poet nor a Romantic, remarked, “The principle of self-interest rightly understood produces no great acts of self-sacrifice, but it suggests daily small acts of self-denial. . . . If [it] were to sway the whole world, extraordinary virtues would doubtless be more rare; but I think that gross depravity would then also be less common.” Doux commerce makes for Temperance. And also for part of Justice. The philosopher Lester Hunt recently imagined that “if the rules and practices of commercial transactions were plucked out of the world and gift-exchange were carried on without them, . . . self-respect would lack some of the support it is granted in [our actual, capitalist world].” Hunt seems to consider his mental experiment to be improbable. It is not. It is a description of the ethical world of the West before the triumph of the bourgeoisie. Richard II and Harry Bolingbrook followed no rules and practices of commercial transactions. Self-respect in their world, and on Shakespeare’s stage, lacked any support but rank and violence.
Since 1848 the critic of capitalism has made three counterclaims, all of them I am sorry to say mistaken. As a practical project, the critic says, capitalism works poorly, immiserizing us or subjecting us to chronic collapse. Such a claim, I shall try gradually to persuade you, is mistaken. And capitalism, the critic also says, generates inequality. A class of poor people, at home or abroad, is supposed to be necessary for bourgeois prosperity. That, too, is mistaken. And to come to the present point, capitalism, he says, has debased values, making people greedy, vulgar, alienated, and depraved. Mistaken again. The play-by-play man would remark that our anticapitalist critic, coming up to bat late in the ball game, is “oh for three.”
The theologian William Schweiker expresses the criticisms succinctly: “The modern age in the West . . . brought great rewards. . . . Yet it has led, ironically, to the demeaning and the profaning of human existence and all of life through wars, ecological endangerment, and cultural banality.” With great respect for the person and the generous sentiment, I would reply: no. The reaction to the project, not the project itself, brought the wars. The absence of property rights brought the ecological endangerment. And human culture has always been banal, mostly. What survives into museums and history books is normally the nonbanal, giving us an exalted notion of the past, an anxiety of influence.
The claim on the left, in short, is that regardless of the individual capitalist’s virtue or vice the system of capitalism leads to evil. The claim is mistaken.
We need to defend a defensible capitalism. We citizens of the bourgeois towns need to rethink our love and courage. We need to nourish the commercial versions of temperance, justice, and prudence that were admired during the eighteenth century by some in the commercial societies of northwestern Europe, and by at least the merchants themselves in Japan. And we need to find a safe home for our faith and hope. For failures in just these regards, see the Muslim, and especially the Arab, and especially the Saudi Arabian world, 1967 to the present. And see, for an earlier case, the Christian, and especially the Western European, and especially the German- and English-speaking world 1517 to 1689.
If we can do all this ethical reinvestment, we can avoid repeating the slaughters and lesser sadnesses of the twentieth century.