Bourgeois Values Aren’t Enough

     

Deirdre, your points are well taken.  I still think you miss my point about the Netherlands – that the Dutch are free riders on what the English, French, Germans, and Americans created, especially in technology – not that they didn’t do well for their time.  They prospered and had bourgeois values, but somehow that was not sufficient for them to produce the Industrial Revolution, which was the phenomenon your books wished to explain.  If the presence of early British property rights without growth causes you to dismiss the role of institutions, I don’t see why a bourgeois Netherlands doesn’t weaken the case for values as a sufficient condition.  As you yourself note, values and attitudes combine with appropriate institutions to produce Modern Economic Growth.

Also, the Chinese case illustrates that because most of the world is and was so poor, modest changes in policy, even if values lag behind, can still do wonders.  Most countries like the Philippines just need to change policy or rearrange the political process to unleash tremendous growth.  But I see no easy way of creating sustainable liberal policy if entrenched interests and existing social coalitions impede the liberal rules that already exist.  Conversely the Chinese had no formal property rights till just a few years ago, but in practice were more receptive of competition and capital accumulation than the rhetorically liberal Philippines and parts of Latin America.

But in general, we have converged to a joint equilibrium, and I gladly accept the point that it makes no sense to study materialist causes without some consideration of the attitudinal changes.  I still insist that a truly strong case for the importance of ideas should be more persuasive to the unconvinced, and I don’t believe we are there yet.