The main idea of this book is deeply counter Marxist and even counter materialistic. It posits that tremendous growth in productivity and wellbeing of humanity over last 300 years was caused by dramatic change in ideological attitudes to the business and bourgeois middle class that represents it. The attitude changed from complete contempt traditionally expressed by aristocracy, clerisy, and peasantry to respect and even somewhat adulation. Author calls the new ideology “Trade Tested Betterment”, meaning that economic players have incentives to improve productivity, types of goods and services they produce, and then put it out for test by free market competition where some of these would survive and some would not. As the result it opened the way for population to produce and exchange goods and services relatively freely with diminishing of usual intervention of state in their business, and, moreover, allowed retaining profits in the hands of producers. The secondary idea however is that starting in 1848 the clerisy conducted successful complain against dignity of business resulting in catastrophic revolutions of XX century and dramatic slowdown of economic development in early XXI century. The fight is still on and it is not clear yet whether clerisy will succeed in stopping capitalist development of humanity.
First Question: What Is to Be Explained?
Part I A Great Enrichment Happened, and Will Happen
1 The World Is Pretty Rich, but Once Was Poor; 2 For Malthusian and Other Reasons, Very Poor; 3 Then Many of Us Shot Up the Blade of a Hockey Stick; 4 As Your Own Life Shows; 5 The Poor Were Made Much Better Off; 6 Inequality Is Not the Problem; 7 Despite Doubts from the Left; 8 Or from the Right and Middle; 9 The Great International Divergence Can Be Overcome
This part reviews dramatic results of economic development of capitalist countries over the last 300 years comparatively with not only previous development, but also with contemporary development of countries that did not move to Trade Tested Betterment. The results are amazingly obvious: not only western countries that embarked on this methods of society organization prospered, but also big eastern countries such as China and India moved to prosperity as soon as they started to use the same approach. Side story here is that it impacted not only rich, it improved lives of poor even more so these poor now have more access to goods and services than rich of the past.
Second Question: Why Not the Conventional Explanations?
Part II Explanations from Left and Right Have Proven False
10 The Divergence Was Not Caused by Imperialism; 11 Poverty Cannot Be Overcome from the Left by Overthrowing “Capitalism”; 12 “Accumulate, Accumulate’ Is Not What Happened in History; 13 But Neither Can Poverty Be Overcome from the Right by Implanting “Institutions”; 14 Because Ethics Matters, and Changes, More; 15 And the Oomph of Institutional Change Is Far Too Small; 16 Most Governmental Institutions Make Us Poorer
This part looks at traditional explanations for explosive growth in productivity such as Imperialistic robbery of resources from other countries, accumulation of capital, development of new institutions, and wise governmental policies. Author rejects all these explanations because: divergence in Europe that caused continuing improvement in militaristic performance provides good reasons for European dominance over the world, but could not explain internal improvements in productivity. Accumulation of capital could not explain it either, because countries that had longer history of development like China did not get there first despite such huge capital investment as irrigation systems or great wall. The idea of institutional explanation also does not hold water because laws, effective property rights, and such existed for a long time, but did not lead to any significant improvement in economic growth. Actually author accepts role of institutions as necessary condition of improvement, but denies their sufficiency and even provides small chapter on deleterious effect of some government institutions on economic growth.
Third Question: What, Then, Explains the Enrichment?
The next 6 parts trying to explain how exactly the great enrichment occurred by looking at different sides of ideological processes in western societies.
Part III Bourgeois Life Had Been Rhetorically Revalued in Britain at the Onset of the Industrial Revolution
17 It Is a Truth Universally Acknowledged That Even Dr. Johnson and Jane Austen Exhibit the Revaluation; 18 No Woman but a Blockhead Wrote for Anything but Money; 19 Adam Smith Exhibits Bourgeois Theory at Its Ethical Best; 20 Smith Was Not a Mr. Max U, but Rather the Last of the Former Virtue Ethicists; 21 That Is, He Was No Reductionist, Economistic or Otherwise; 22 And He Formulated the Bourgeois Deal; 23 Ben Franklin Was Bourgeois, and He Embodied Betterment; 24 By 1848 a Bourgeois Ideology Had Wholly Triumphed
This part looks at representation of bourgeoisie in literature using examples of novels by Jane Austin and plays by Samuel Johnson. However the most attention author allocates to Adam Smith, but not to his usually discussed economic masterpiece “Wealth of Nations”, but to his less known “The Theory of Moral Sentiments” in which Smith discusses complexity of bourgeois ideology, stressing that it goes way beyond purely material (prudential) considerations. There is a very interesting moral and ideological interplay between bourgeois need in honesty and trustworthiness that dramatically decreases cost of transactions and enticement of monopoly and use of informational disparity between seller and buyer. One important point is that bourgeois control over political power could remain bourgeois only in condition of democracy when individuals currently in power could not use it to stop competition and consequently betterment. When they are able to do it bourgeois order naturally degrades into aristocracy as it did happened in Venice and many other places. There is also interesting discussion here about virtues nicely presented by diagram below:
Author also discusses “the Bourgeois Deal” as it was formulated by Adam Smith, which actually contains not one but two “invisible hands”. In addition to “invisible hand” of market forces it has “invisible hand” of “natural liberty” that removes very visible hand of the state from controlling and directing individual actions leaving choice of winners and losers to market place only. As example author analyses Ben Franklin’s live as quintessential bourgeois type. Finally in this part author looks at classes and their values: Aristocrat vs. Peasant vs. Bourgeois and trying to prove that by 1848 the Bourgeois triumphed over Aristocrat and Peasant. Here is a nice table for this comparison:
Part IV Pro-Bourgeois Rhetoric Was Forming in England around 1700
25 The Word “Honest” Shows the Changing Attitude toward the Aristocracy and the Bourgeoisie; 26 And So Does the Word “Eerlijk”; 27 Defoe, Addison, and Steele Show It, Too; 28 The Bourgeois Revaluation Becomes a Commonplace, as in The London Merchant; 29 Bourgeois Europe, for Example, Loved Measurement; 30 The Change Was in Social Habits of the Lip, Not in Psychology; 31 And the Change Was Specifically British
This is about formation of the new ideological attitude to bourgeois activities and people. It starts with tracing development of the world “honest” in literature and general use from aristocratic meaning of belonging to upper class of society to purely bourgeois meaning of acting honestly – truthfully, without cheating and deceit. Similar change occurred in attitudes to trade, the typical bourgeois activity – it went from being despised activity of low-born to, if not necessary noble, then quite decent, productive, and highly approvable. It went in parallel with advancement of typical bourgeois attitude to the world: learning objective facts and acting in accordance to them to achieve success. Author provides evidence from literature and historical evidence to support these ideas. Author however stresses that change was mainly rhetorical, rather than psychological and importantly occurred in the British world.
Part V Yet England Had Recently Lagged in Bourgeois Ideology Compared with the Netherlands
32 Bourgeois Shakespeare Disdained Trade and the Bourgeoisie; 33 As Did Elizabethan England Generally; 34 Aristocratic England, for Example, Scorned Measurement; 35 The Dutch Preached Bourgeois Virtue; 36. And the Dutch Bourgeoisie Was Virtuous; 37 For Instance, Bourgeois Holland Was Tolerant, and Not for Prudence Only
However even in Britain the rhetorical change was somewhat superficial. In this part author provides multiple examples of persistent contempt to bourgeoisie from Aristocracy and Intelligentsia from Shakespeare to any typical politician or lord by using multiple examples from literature of the period to confirm this point. However author also looks at the country where bourgeois virtues actually become the core of national culture – Netherlands. Especially important was such typically bourgeois virtue as tolerance extended far beyond tolerance to diverse trading partners to religious and political attitudes on individual level.
Part VI Reformation, Revolt, Revolution, and Reading Increased the Liberty and Dignity of Ordinary Europeans
38 The Causes Were Local, Temporary, and Unpredictable; 39 “Democratic” Church Governance Emboldened People; 40 The Theology of Happiness Changed circa 1700; 41 Printing and Reading and Fragmentation Sustained the Dignity of Commoners; 42. Political Ideas Mattered for Equal Liberty and Dignity; 43 Ideas Made for a Bourgeois Revaluation; 44 The Rhetorical Change Was Necessary and Maybe Sufficient
This part is an attempt to identify reasons for this change. Author rejects the idea that such change was preordained part of inevitable progress and believes that it was just serendipitous combination of factors often local and temporary that led to change in attitude. One of the most important was religious change in theology of happiness from passive attitude of “’god willing” to active attitude “work hard to get there”. The significant part of the process was availability of printing and explosion of reading and discussing political matters. At the end of this part author promotes idea that rhetorical change in attitude to bourgeoisie was not only necessary, but also maybe even sufficient to start up process of great enrichment via trade-tested betterment.
Part VII Nowhere Before on a Large Scale Had Bourgeois or Other Commoners Been Honored
45 Talk Had Been Hostile to Betterment; 46 The Hostility Was Ancient; 47 Yet Some Christians Anticipated a Respected Bourgeoisie; 48 And Betterment, Thou Long Disdained, Developed Its Own Vested Interests; 49 And Then Turned; 50 On the Whole, However, the Bourgeoisies and Their Bettering Projects Have Been Precarious
Here author discusses traditional disdain to trade typical for practically all cultures and people. One of the reasons for this is that bourgeois methods require the development of relatively high levels of human contacts. Here is nice table for this:
Part VIII Words and Ideas Caused the Modern World
51 Sweet Talk Rules the Economy; 52 And Its Rhetoric Can Change Quickly; 53 It Was Not a Deep Cultural Change; 54 Yes, It Was Ideas, Not Interests or Institutions, That Changed, Suddenly, in Northwestern Europe; 55 Elsewhere Ideas about the Bourgeoisie Did Not Change
This part is about words being the core of economic activities and how they changed dramatically and quickly. Author analyses share of economic activities, that is mainly dependent of verbal activities, and finds that it by far exceeds any other activities involved in generating goods and services. Author also provides example of quick change in rhetoric leading to dramatic consequences such as brief and murderous rule of Khmer Rouge. Author also reviews and rejects other potential causes of the change such as institutions and interests, claiming that these did not change that much. Finally author compares other parts of the world where attitude to bourgeoisie did not change and finds that they also did not have anything like economic revolution of the western countries.
Fourth Question: What Are the Dangers?
Part IX The History and Economics Have Been Misunderstood
56 The Change in Ideas Contradicts Many Ideas from the Political Middle, 1890-1980; 57 And Many Polanyish Ideas from the Left; 58 Yet Polanyi Was Right about Embeddedness; 59Trade-Tested Betterment Is Democratic in Consumption; 60 And Liberating in Production; 61 And Therefore Bourgeois Rhetoric Was Better for the Poor;
To answer the question about future author first summarizes history of economic ideas about reasons and causes of drastic economic growth of the last few centuries. Author looks again at North and Thomas ideas of institutional development, XIX century Marxist ideas of capital accumulation, contemporary redistributionist ideas based on zero sum economy. Author allocates lots of space to polemics against Polanyish ideas of capitalism as recent development despite plentiful evidence of existence of market economy and property right for thousands years throughout human history. Here is a nice table demonstrating various ideological constructions:
The last two chapters of this part are restating author’s logic that change in rhetoric and attitudes led to trade-tested betterment as key method of economic activities in western societies leading to dramatically improved productivity and innovation and consequently improvement in lives of everybody including poor.
Part X That Is, Rhetoric Made Us, but Can Readily Unmake Us
62 After 1848 the Clerisy Converted to Antibetterment; 63The Clerisy Betrayed the Bourgeois Deal, and Approved the Bolshevik and Bismarckian Deals; 64 Anticonsumerism and Pro-Bohemianism Were Fruits of the Antibetterment Reaction; 65 Despite the Clerisy’s Doubts; 66 What Matters Ethically Is Not Equality of Outcome, but the Condition of the Working Class; 67A Change in Rhetoric Made Modernity, and Can Spread It
The last part reviews ideological development after 1848 when bourgeois value again came under sustained attack, this time not from Aristocracy, but from the increasingly numerous and consequently empowered part of population – Clerisy. Either in its Bismarckian relatively benign welfare state or in its radical bloodthirsty Bolshevik / Nazi incarnation XX century societies were mainly driven by Clerisy with its rejection and contempt for all things bourgeois. As result the economic development and prosperity growth in parts of the world where Clerisy’s ideas become dominant where slowing down or even reversed. Author demonstrates how it happens and keeps pressing the idea that we need to reject clerisy’s anti-betterment efforts and unmask their reasons: income inequality and similar fuses used by Clerisy are false narratives because in reality bourgeois rhetoric and practice led to tremendous improvement in lives of regular people and this is what really matters.
MY TAKE ON IT:
It is somewhat difficult for me, with my Marxist education and background, to accept author’s main position that it was the ideas that matter the most, not material and technological development. Nevertheless I find it very stimulating to look at reasons for industrial revolution in human minds rather than in steam engine and I think it is the right place to look at. However I do not think that explanation of the ideological change, as mainly serendipitous event, is good enough. I personally believe that it is much more realistic to look at it as the consequence of interplay of Darwinian struggle for survival at two levels: individual and group. The individual struggle occurs within society and has mainly peaceful character because alternative is chaos that inevitably leads to dysfunction of society. The struggle between groups however more often than not leads to intermediate change from war to peace and back, but could never be completely settled in peace until groups merge or one group annihilates another. Two developments are possible and actually occurred in history. One is unification of society as one group big enough so wars or trade with external societies have only marginal effect as it happened in China or Russia. In this case Clerisy, which controls organized power in all societies, becomes dominant and just does not allow development of bourgeois ideas and dignity to occur. In this case individual struggle comes down to meritocratic advancement via some kind of examination and/or bureaucratic maneuvering. Another model of development: small states always in war and/or extensive trade with each other eventually bound to generate 2 different power centers in society: Aristocracy that handle the war and Bourgeoisie that handle the trade. On early stages of development before effective firearms developed Aristocracy has huge advantage in use of power because it is mainly manual and requires constant training so one well trained man with a sword can easily overcome a dozen untrained individuals with exactly the same type of swords. In this case Aristocracy could not only require significant share of production as payments for protection from external groups and maintaining internal order, but also just take whatever it wants from actual producers internally within a group (society). As soon as firearms become effective, bourgeoisie can protect itself with minimal training, refuse Aristocracy’s unlimited ability to take and start imposing its own virtues on society. Eventually with development of mass mobilization and conscript armies it becomes capable to send Aristocracy to dustbin of history. However the following peaceful consolidation of society and consequently its wealth and complexity causes expansion of growth and with it expansion of Clerisy required to maintain order and internal interactions in complex society in its role as bureaucracy, but in process producing multitude of individuals with expensive qualifications, but no ability to find good place in bureaucracy or aptitude to achieve level of success in business that they feel entitled to. Logically either bureaucratic or redundant parts of Clerisy necessarily reject bourgeois values as incompatible with their values. The key differences in values are caused by methods of achieving success: Trade Tested productive work for bourgeoisie and Formal Testing and Bureaucratic maneuvering for Clerisy.
We are living at the moment of continuing struggle between these two groups with periodic change from Clerisy winning, and then leading to economic downfall, decrease in prosperity for everybody except for corrupted top-level members of Clerisy. Eventually it gets rejected by majority, causing Bourgeoisie winning, and then leading to economic improvement overall, but dramatic increase in inequality between winners and losers, with significant number of losers being educated members of Clerisy capable organizing losers into movement to reject Bourgeois order in reestablish Clerisy dominance. I believe this periodic process is coming to the end, but it would take another 50-100 years to find new structure of society where Clerisy would become unnecessary and Bourgeois ideas of Trade-tested Betterment will completely win.