McCloskey, Western equality, and Europe’s Jews

Warren shot me the following email a few days ago:

Brandon, do you know the name Deirdre McCloskey?

She is a first-rate economist with extensive expertise in history, literature and anthropology.  She recently finished a trilogy, the third volume of which is “Bourgeois Equality.” It’s a fat book but you would be well rewarded for time invested.  You don’t have to read the first two volumes to benefit from the third.

The purpose of the trilogy is to explain why we’re 30 times richer than our forebears of 250 years ago, as best that can be estimated.  Conventional answers like the industrial revolution and rule of law don’t go far enough.  The answer lies in attitudes toward commerce.

I haven’t read McCloskey’s book yet, but it’s been on my amazon wishlist for awhile and thanks to Warren’s prodding it’ll be my next purchase. (Here is all of NOL‘s stuff on McCloskey so far, by the way.)

My first instinct on this topic is to think about Europe’s Jews. Bear with me as I lay out my thoughts.

McCloskey’s book, which as far as I can tell takes readers to the Netherlands and the United Kingdom from the 17th to 19th centuries, is about how Europeans began to reconceptualize equality in a way that was very different from notions of equality in the past.

A very basic summary is that notions of equality in Europe prior to the modern era largely aligned with notions of equality elsewhere in the world. Basically, an established hierarchy based on either inherited land ownership or clerical ranking was justified in all cultures by a religious appeal: “we’re all Christians or Buddhists or Muslims or fill-in-the-blank, so don’t even worry about what we have and you don’t have.” This way of thinking was irrevocably altered in 17th century northwestern Europe. Once I actually read McCloskey’s book, I can give you more details (or, of course, you can just read it yourself).

This argument, that northwestern Europe became free and prosperous because of a change in ideas about equality, is of course very broad and qualitative, but I buy it. The big “however” in this line of reasoning is Europe’s treatment of its Jews.

I forget where I heard the argument before, but somebody or some school of thought has argued that because Europe’s Jews were forced by legislation to go into “dirty trades” like commerce, they became more broadly open-minded than other ethnic groups in Europe and therefore more prosperous. Dutch and British bourgeois culture no doubt had a Jewish influence, and because bourgeois culture is internationalist in scope this Jewish influence must have penetrated other European societies, but anti-Semitism in these other bourgeois centers was more rampant than than it was in the UK and the Netherlands. Why was this?

My main guesses would be “Protestantism” (because Protestants at the time were more open-minded due to being at odds with the Catholic Church), or “the seafaring character of British and Dutch societies.” These are just guesses though. Help me out!

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3 thoughts on “McCloskey, Western equality, and Europe’s Jews

  1. I’m curious: Did you get the book yet? Read it? I meant to comment when you first posted this, but never got around to it. I haven’t read Bourgeois Equality, but I read The Bourgeois Virtues and maybe a quarter of Bourgeois Dignity, the first and second books in the series. (I also got to hear her speak at the American Philosophical Association meeting in San Francisco this past spring. A fast talker.) She is a very entertaining writer, and her breadth is amazing, but the books are long…

    Her theme is always pretty much the same: economic progress requires (and encourages) virtues, norms, ideas, values substantially beyond the material self-interest that is typically the exclusive explanatory factor in economic analysis. So for example, the theme of Bourgeois Dignity is that trade and productive enterprise took off in England in the industrial revolution, and in the Netherlands somewhat before that, mainly because commerce became “cool.” The culture changed to enable people engaged in trade to hold their heads up in good company rather than being despised as banausic.

    Thus, she is against the sort of explanation of why commerce took off during the industrial revolution that is offered by “new institutionalists” like Daron Acemoglu and James Robinson in Why Nations Fail. Acemoglu and Robinson try to explain things exclusively in terms of the usual economic incentives. Thus, for economic progress to occur, social institutions (especially government institutions, but other social and cultural institutions as well) have to be structured in such a way as for the powers-that-be to see commercial activity, open competition, free markets, the fair and neutral enforcement of property rights, and so forth, as in their self-interest. Since powers-that-be usually are powers-that-be by virtue of maintaining themselves at the top of a hierarchy and expropriating the output of those who are below them, the conditions necessary for economic progress don’t come along very often. And even when they do come along, they sometimes get wrecked by the temptation to use government power to return to the usual expropriative ways. Nevertheless, occasionally humanity gets lucky. That’s A&R’s theory in a nutshell, and you can see how it differs from McCloskey’s theory that intrinsic values drove the explosion of economic progress since the industrial revolution.

    A third theory, which is less well known, is Meir Kohn’s “new theory of economic progress,” presented in his book, Commerce, Predation, and Production: A New Theory of Economic Progress. The book is unpublished. I don’t know why. He seems to have been working on it for about twenty years. The version I’ve linked to seems to be at least the third draft. Kohn is like A&R in that he sticks to the traditional economic incentives as his principle of human motivation, but there are some significant differences between his theory and theirs. The most important difference for me is that he offers more insights than A&R do into how conditions come about that enable government to stop preying on trade and production. His book presents a detailed economic history of Europe from about 1000 to 1650 (and follows up with a similar history of China from around 0 to 1800). So he looks at the times and places where commercial activity sprouted up and asks what made it happen. Usually it’s that the elites themselves—lesser elites, not the very top dogs—found themselves in a situation where commercial opportunities offered a tempting avenue to wealth. They could produce a surplus and trade it to the wealthy. This had to be combined with a certain amount of weakness on the part of the very top dogs. Weakness among the ruling predators is normally crucial for economic activity to emerge. But then—a second step—commercial activity leads to wealth which leads to power. Commercial centers, whether medieval northern Italian cities or the seventeenth century Netherlands or eighteenth century England, become powerful and able to defeat or at least survive against their often much larger competitors in war. So the competitors become imitators or sink into irrelevance. So you can see that this is a very Hayekian sort of account of how market-based societies emerged through cultural group selection (though Kohn doesn’t cite Hayek for some reason).

    Kohn’s book has the advantage that it is free for now. Like McCloskey’s, it’s pretty long. But the first chapter sums the theory up nicely.

    Neither McCloskey nor A&R nor Kohn make much of the Jews in their stories of the economic development of western Europe. Maybe they simply weren’t that important? The Rothschilds are the most famous case, but it seems to have been the late eighteenth century before they became important. Kohn talks mainly about the northern Italians and the Dutch, and the Jews don’t seem to have played much of a role in their story. So I’m afraid I can’t help you there.

    • Thank you for your thoughts, Dr Potts.

      I haven’t ordered McCloskey’s book yet, and I am thankful for your concise summary of the research on economic development that has been going on for the past two decades (especially your mention of Kohn’s work, which I was previously unaware of). UCLA’s Jared Diamond is another scholar whose work on the rise of the West has influenced my thinking on this subject.

      My question, though, has more to do with the equality aspect in McCloskey’s narrative. I understand that commerce became cooler in areas where economic development took off, and I understand why this came about (elites had to grant the plebes a measure of respect that they previously did not have to), but it seems to me that the respect granted to plebes was not extended to religious or ethnic minorities living in these areas of economic growth. Instead, a conception of Otherness grew in tandem with notions of equality.

      This Otherness has led to some results that we now read about in history books and hear about in the news on current events, specifically chauvinistic nationalism.

      I suspect that the equality McCloskey identifies is largely responsible for the nationalism that ruined Europe during all of the the World Wars of the modern period and that is now plaguing the post-colonial world. Elites simply could not extend notions of equality to Others – even those who were born and raised in their hometowns – and so equality has had to evolve along with conceptions about nationalism and Otherness.

      Scholars interested in nomothetic theories of economic development have yet, in my limited readings on the topic, to address the fact that equality in the modern era is intricately tied up to nationalism and Otherness. I think libertarianism – broadly defined – offers up an answer to this puzzle, but I have to think (and blog) slowly about such an argument because it’s still a bit abstract in my mind.

      • I should say I don’t mean to represent myself as an expert on this topic—I’m just reporting on some reading I’ve done.

        Interesting idea about Otherness. My copy of Bourgeois Equality arrived yesterday. I’ve read fifteen pages or so. McCloskey makes clear that she’s talking about classical liberal equality, which she equates with liberty and dignity as much as anything, emphasizing only that these are expanded to include the common people, not just the upper crust. What occurs to me first about the Otherness idea is that you’ll want to say how it differs from the treatment of outsiders—those who aren’t members of the tribe—throughout history. As you probably know, for example, “barbarian” was a term invented by the ancient Greeks to refer to any non-Greek, and it was apparently in use since the Bronze Age. It wasn’t a product of Athenian democracy. Just my $.02.

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