How Big Were Ideas?

     

“The thesis of Bourgeois Dignity,” John says, “still needs more stress testing before we should pronounce ourselves convinced.”  Bien sûr.  Much more scientific work remains to be done, and in “science” I include the humanities.  I observe only that it is more true of the materialist arguments, such as those depending on the improvement of property rights after 1688 (small) or the profits of the slave trade (smaller).  The materialist arguments can’t come close to explaining the Great Enrichment.  That much I think we agree was pretty much established by Bourgeois Dignity.  The third (and final) volume, Bourgeois Equality (forthcoming, deo volente, 2015), provides more stress testing of an ideational hypothesis that all four of us to varying degrees favor.

So I see convergence.  The unadorned neo-institutional notion that Incentives Are All needs sharp revision, admitting the force of words, ideas, rhetoric, ethics, the habits of the heart and mind and lip.  But as John and Joel argue, surely existing structures do matter.  What is disturbing in much of the literature of neo-institutionalism is that it reduces such ideas and language to power and incentives, immediately.  We circle back to Marxist and Samuelsonian materialism, which at any rate as a sufficient cause Don, John, Joel, and Deirdre wish to deny.

John asks, “Whose opinions matter to unleashing the power of the market?”  He is correct that the answer depends on the interaction with existing institutions of, say, power—though I am not surrendering the point that the institutions in turn depended on ethical persuasions.  Clearly, in England at first only the elite and their clerks mattered, when public opinion counted for less than it came to count in the 18th century.  In Holland during the Golden Age a wider public opinion counted.  By the 19th century in Europe the invention of the steam press and cheap wood-pulp paper made public opinion powerful indeed, forcing governments into wars, for example.  Ibsen talks repeatedly of the power of the press in Norway in the late 19th century, by no means always sympathetically. 

Opinions, especially opinions declared to a survey researcher, are of course sluggish.  The French grew rich back when they admired entrepreneurs (admitting that there is, at any rate according to George W. Bush, no word for the concept in French).  And opinion-in-questionnaire is not the same as opinion-in-action.  Saying that one is “anti-capitalist” can range in action from violent overthrow of private property to regulation of the quality of bread in Paris.  I can offer my own example of the paradox of opinion, namely, Sweden.  Americans left or right regard Sweden as “socialist.”  Swedes regard the land of Hollywood and the Koch brothers as capitalist hell.  Neither opinion—though heard frequently—is correct.  Sweden is capitalist (to use the misleading word we seem to be stuck with) and the United States has a larger social safety net than its expressed ideology of free markets would lead one to expect.

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Opinion-in-action is what John is pointing to when he notes that “France ... moved to lower tariffs and to reduce effective restrictions on trade more quickly than Britain, while [French] leaders publicly proclaimed their antipathy to unrestricted free trade.”  But what nonetheless moved the dial was opinion, ideas, in this case elite opinion-in-action, traceable no doubt in the elite’s correspondence.  There’s something John could do to resolve the issue—look into the privately expressed opinions of Chevalier and Rouher in 1859; or look into their educations in economics; or ask whether they had read Bastiat.

John suggests that norms and attitudes might change to accommodate the realities of successful growth rather than the other way around.  Materialism here is redux, but of course it is sometimes true.  The present enthusiasm for markets in China would not be so great if real income were not growing there at upwards of 10 percent per year.  “Is what matters attitudes towards the rising bourgeoisie or the collusion of high-minded thinkers with venal operators eager to profit from changing rules and norms?”  Doubtless both, but when elite opinion is arrayed strongly against markets, expressed at every level of society, as was the case in Shakespeare’s England, the thinkers matter.  That is a point argued in Bourgeois Equality—that before the 18th century all opinion, elite and common, was hostile to betterment and markets.

Indulge me in one sharper reply on a smaller point.  “The Dutch,” John declares, “were also-rans in the story of modern economic growth – a prosperous, happy people that for the most part relied on the innovations and financial transformations of other nations after the 1800s.”  Joel likewise has said that the Dutch become conservative, and “played third fiddle in the Industrial Revolution.”  From this Joel concludes (in personal correspondence) that there must be something amiss in my emphasis on bourgeois liberty and dignity.  After all, the Dutch had both early.

It is unfair in debating terms for me to note that in the forthcoming book, Bourgeois Equality, I stress that the bourgeoisie is capable of reversing its betterment by making itself into an honorable hierarchy, which is one way of describing what the Dutch regents did in the 18th century.  But we are not debating here.  We are trying to discern the truth.  In aid of the truth I want merely to point out that John and Joel are adopting in their remarks the mistaken convention that the Dutch “failed” in the 18th century.  They did not.  Like Londoners, they gave up their industrial project in favor of becoming bankers and routine merchants.  National borders do not always compute.  If one is to blame the Dutch in the 18th century and early 19th century for conservatism, one will also have to blame the Southern English, who also turned to specializing in mere trading and financing, giving up their industrial might.  And London and the Home Counties, also like the Dutch, though at a very different level to start with, adhered to distinctions of rank that were less important in the industrial North. 

Joel’s inertial lemma—that once initiated, a social change must be permanent or else it did not exist in the first place—makes graver problems for his own emphasis on science as the initiating event than for mine on bourgeois dignity. After all, the Dutch in the 17th century had invented the telescope and the microscope among numerous other scientific devices, such as the pendulum in clocks.  Why did not inertia propel them, then, into the Industrial Revolution and the Great Enrichment?           

“And what of cases where bourgeois approval is granted,” John continues, “but rules are held back for fear of ethnic clashes due to asymmetric success of visibly different minority groups?”  Yes, of course.  But that is best treated in response to Don, which see.