What made us rich are the ideas backing the system — usually but misleadingly called modern “capitalism” — in place since the year of European political revolutions, 1848. We should call the system “technological and institutional betterment at a frenetic pace, tested by unforced exchange among the parties involved.” Or “fantastically successful liberalism, in the old European sense, applied to trade and politics, as it was applied also to science and music and painting and literature.” The simplest version is “trade-tested progress.” Or maybe “innovationism”?
What made us rich are the ideas backing the system. And yet the ideas have always been under attack, and we seem to be undergoing a period in which they are attacked with great vehemence by some important elites.
Attacks on capitalism are part of the ‘trade-tested progress’ package. Indeed, lack of serious attack is one of the less historically normal features of the current situation.
I’ve noticed they usually don’t want to dismantle the capital. The smarter ones know they don’t want to own the capital.
A good friend has observed “life in society is essentially Calvin Ball”
In particular, it’s about trying to get the rules changed so you win.
Some large fraction of attacks on capitalism/tax systems/electoral arrangements/trade arrangements etc etc is really “I and my people lost under this system, we want a different system were we win…” followed by some argument designed to sway the middle masses.
A related set of “attacks” can be summarized as “SOMEbody needs to be IN CHARGE! and by the way that SOMEbody should be ME…”
I may be wrong but it sounds like Deirdre is claiming that technological innovation is independent of human capital such as intelligence. If so, I disagree. It also seems that technology is the primary driver, and “ideological orientation” only dominates when all out 20th century Marxism is in play, otherwise a wide range of values from liberalism to nationalism are compatible with economic prosperity.
I must admit that the cultural Marxism on display in the two paragraphs preceding the final is causing me much mood affiliation. Perhaps I am looking for disagreement as a result.
As an avid reader of McCloskey, including drafts of “in process,” I recommend studying (close reading) [as Arnold has] the works of North, Wallis and Weingast on “Open Access” beginning with NBER Working Paper 12795 (2006) on up through the latest edition of “Violence and Social Orders” (Cambridge 2009/13) for a “framework for interpreting” what commenced about the second quarter of the 19th century.
I may have just become an avid reader of McClosky myself.
It is indeed remarkable what people can accomplish when they finally become unburdened of the load of the adjectives and pejoratives that others keep trying to make them carry and live up to.
A word more about what McCloskey writes:
If one “reads closely” ( a really daunting task) the underlying theme for everything, wealth, technical progress, learning, that has taken us this far in so (relatively) short (and recent) a period is the effect of how we came (as Bourgeois, e.g.) to look upon and regard one another. Even the differences amongst societies in the nature of that regard, by degrees or practices, correlates to what has occurred economically – and ultimately in world violence. [Now ongoing]
They are attacked verbally, not in action Arnold. Look at tax take as pc of GDP..its barely moved for decades.
What would GDP be minus the verbal attacks?
I came across this today. It is in a similar vein
“All mankind’s progress has been achieved as a result of the initiative of a small minority that began to deviate from the ideas and customs of the majority until their example finally moved the others to accept the innovation themselves.”
–Mises, Ludwig von. Liberalism (p. 54).
Of course, classical liberalism not only tolerates but supports the deviation in ideas and customs.
I’ve been trying to come up with a more encompassing definition of capitalism. The version of capitalism that has enriched mankind is the one that extends the liberty to better ones self through retention and investment of surplus earning to all individuals. As restrictions on who is granted the capitalism liberty increase, prosperity declines. And the capitalism liberty is granted since it is dependent upon the state permitting the retention of some portion of surplus earnings, i.e., net taxes, issuing license to operate, not overburdening with regulation, permitting use of real property, permitting trade in the produced good, etc.