Thursday, October 6, 2011

North & McCloskey on Western Technological Advances

A fascinating passage:


There have been lots of reasons offered by economic historians for this transformation, but these have all been called into question by economic historian Dierdre McCloskey, who began working on this issue as Donald McCloskey three decades ago. In a proposed six-volume set, The Bourgeois Era, McCloskey is exploring this question in detail. Two volumes are available. They have presented the problem. In volume 2, Bourgeois Dignity. McCloskey refutes the prevailing explanations one by one.

Then what did it? McCloskey's theory, not yet proven: a change in attitude toward the legitimacy of wealth. This began in the 17th century in the Netherlands. (McCloskey speaks Dutch.) This spread to Scotland and England.

I am partial to the thesis. I have believed it for at least 25 years. But there is a problem. What motivated people to change their views after – basically – the history of mankind? These were Calvinist societies in the 17th century. What changed in Calvinist theology in the century after Calvin? The 17th-century creeds did not change the theology. The Synod of Dort (1619) and the Westminster Assembly (1643-47) did not alter the old Calvinism. So, what was the crucial factor?

I have a suggestion: their concept of the nature of God's kingdom on earth. The shift was to what is today called postmillennialism: the belief that the final judgment only comes after Christ's kingdom has filled the earth. This transformation involves compound blessings (Deut. 28:1-15) including economics. This was not held by Lutherans and 16th-century Calvinists.

In both the Netherlands and Scotland, there were postmillennial theologians. But McCloskey's research challenge will be to see if the supposed shift in attitude toward business wealth was associated with this shift in eschatology. If there was no connection, then what was the source?

Adam Smith's Wealth of Nations (1776) favored economic wealth. He was a Scot. He was a liberal Presbyterian. But McCloskey thinks the change in attitude preceded Smith by 150 years.

Proof is scheduled for Volume 3. I await it with great anticipation.

McCloskey became co-editor of the American academic journal, The Journal of Economic History, in the spring of 1982. Beginning 15 years earlier, the editor had been my professor, Hugh Aitken. I recall the evening in a graduate seminar, probably in 1966, when Aitken had posed the #1 question. How did the transformation happen? He said the scholars did not know.

As far as I can see, they still do not know.


Harvard historian Niall Ferguson has called the great transformation of the West the great divergence. Asian nations had about the same wealth per capita as Western nations in 1800. By 1900, the two societies diverged greatly. This continued until 1970, he argues.

In a TED video, Ferguson attributes this to six factors:

Competition (both political and economic)
The scientific revolution
Property rights (not democracy)
Modern medicine
The consumer society
The West's work ethic

I don't believe any of this. That is because I have read McCloskey's two volumes (twice). McCloskey refutes them all, plus a dozen more.


Tom Van Dyke said...

I don't know what to think of this. The Dutch sea-going traders of the 1600-1700s seem a lot like the Italian city-states of the 1100s, Milan, Venice, Genoa, etc.

Come 1500,

In the 1300s, just as the Italian Renaissance was beginning, Italy was the economic capital of Western Europe: the Italian States were the top manufacturers of finished woolen products. However, with the Bubonic Plague in the 1400s, the birth of the English woolen industry and general warfare in Italy, Italy temporarily lost its economic advantage. However, by the late 1400s Italy was again in control of trade along the Mediterranean Sea. It found a new niche in luxury items like ceramics, glassware, lace and silk.
However, Italy it would never regain its strong hold on textiles. And though it was the birthplace of banking, by the 1500s German and Dutch banks began taking away business. Discovery of the Americas in the late 1500s as well as new trade routes to Africa and India (which made Portugal a leading trading power) brought about the decline in Italian economic power.[8]


And of course, the Dutch, Portuguese and Spanish each ran out of gas in turn. I like McCloskey, but I need to hear more on this. Seems like every dog has his day.

Jonathan Rowe said...

McCloskey's stuff is certainly on my list. One thing I get out of North's article is the uncertainly factor: Scholars just don't know.

I remember listening to one who said something like if the "progress" of Ancient Greece and early Rome continued unabated, we would have had cars before the year 1000.

But it didn't.

jimmiraybob said...

Just three quick comments.

McCloskey's theory, not yet proven:....

It's not a theory, it is a hypothesis, or, as North later states, a "thesis".

I am partial to the thesis. I have believed it for at least 25 years.

There might be a little confirmation bias happening here. And by a little I mean a lot.

...McCloskey refutes them all, plus a dozen more.

McCloskey may offer refutation but that is not the same as overcoming their legitimacy and relevance. We have all refuted lots of things later to find out the refutation does not hold up. A better term might be challenged but that would not serve the same purpose in the commentary.

Overall, North wants a very narrow focus that excludes factors that have, throughout history, driven economic change. It seems absurd to attribute economic growth to a change in a religious perception. It seems far more likely that religious perception follows the money.

Jonathan Rowe said...

The Straussians have been wrong on more than a number of things. But this is one area where I think they are correct. Of course, lots of intellectual groundwork -- tracing back to ancient Greece -- was done before the event. But around the late 18th Cen. there was a great public "concern" placed on man's material needs or the things of this world. And the confidence that the new Newtonian scientific method could, almost in a "singularity" sense, answer all these questions.

This isn't to say it was secretly atheistic (as the Straussians do); but rather the public theology that this new paradigm required would be one that was more man centered and rational

bpabbott said...

Re: It seems absurd to attribute economic growth to a change in a religious perception. It seems far more likely that religious perception follows the money.

I agree. However, I'm not convinced that human economic behavior and human religious behavior are independent. Perhaps they they have common biological / social roots?

Tom Van Dyke said...

Or, Ben, folks rationalize their religion the same as they rationalize their philosophy, their politics, what haveyou.

Marxist theory sez this is basically how man works. What's in it for me? What fattens my wallet or confirms my prejudices? Either one works, when push comes to shove.

I don't think this contradicts Marx or any clear-eyed view of religion. At least for the greater segment of man.

But there are these weird occasions when and where Marxist theory fails.

However much Jefferson was the slaveowner and didn't even free his slaves at his death as Washington did, we can see in his writings that he knows it's wrong.

Conscience. The one thing a man can't lie to. Try as he might, and he does.

Unknown said...

I agree this is fascinating Jon. A lot of this is talked about in a book called "The Puritian Hope" which talks about Heaven coming to Earth and the Millenial Reign.

All the major religions and philosophies all seem to hope or point to some golden age ahead. If true(and I believe it is) then the question is how to bring it about.

Jonathan Rowe said...

Joe: One of the things that Marxists, the more extreme Enlightenment types, and those Christians looking forward to the millennium have in common is they all seem to be Utopians.

jimmiraybob said...

Enlightenment Marxists? Utopians? Thomas More?

Jonathan Rowe said...

Enlightenment utopia preceded Marx. And there's something utopian about the idea of the biblical millennium.

One of the fascinating things about Revs. Richard Price & Joseph Priestley (both brilliant scientists) is how they combined Hal Lindsey like (as TVD sees it) biblical prophesy and millennialism with Enlightenment perfectibility of man rationalism in their idea of a utopia. (Perhaps it's the utopian idea of a final solving of all man's problems evident in both millenialism and more radical Enlightenmentism that allowed for them to synthesize them.)

But then again, the biblical unitarian Isaac Newton, who kicked off the whole Enlightenment project was a Bible code guy and an alchemist.

jimmiraybob said...

Thanks Jon. The reason that I brought up Thomas More is that I was just re-reading his Utopia and some of the commentary on it since its publication.

It appears to be a quasi Biblical, tightly regulated and monitored communalism (some commentators have called it communism) mashed with a humanistic belief in human perfectability based on reason. (I think the last time I thought about Utopia was in high school.)

The re-reading of More comes on the heels of finishing Stephen Greenblatt's The Swerve, which highlights the rediscovery and dissemination of Lucretius' De rerum natura (Usually translated as On the Nature of Things). I bought The Swerve largely because it highlights a period that KOI has brought into the discussion on ideas and modernity.

The story that's told of the rediscovery of Greek and Roman classical ideas during the Italian Renaissance is fascinating. (Bonus: insider jokes from the RC curia.) The Swerve is also not a bad primer on Epicurian thought on the pursuit of happiness, which T. Jefferson explicitly embraced - as we know, T. J. famously called himself an Epicurian in his October 13, 1819 Letter to William Short and owned 5 or 8 editions of De rerum natura in, at least, Latin & Greek and English translations.

A strain of Epicurean thought runs through much of post-Renaissance Europe (in education and the arts as well as the developing science of politics & government) and is a leading contender in advancing modern thought.

Tom Van Dyke said...

JRB, there are a number of scholars who see More's Utopia as satire.

The Straussians see Plato's Republic rather the same way, that Plato is not designing the perfect republic as much as illustrating what it would need to look like, hence the impossibility of achieving it. Guardians and philosopher-kings are myths, not real people.

jimmiraybob said...

JRB, there are a number of scholars who see More's Utopia as satire.

I've seen this mentioned but haven't read any specific commentary. Do you have any citations?

There seems to me a lot of hints along the way (in the text) but I can't get a handle on what specifically is being satirized.

Tom Van Dyke said...

Sorry, JRB. There are hits on JStor, but I can only see the first page.