The Same Anti-Economic Project of Creativity: Reply to Jonathan Feinstein

Jonathan Feinstein I think somewhat misunderstands what I am about, and my relation to the more usual history and the more usual economics. He has read, I know, all 500 pages of The Bourgeois Virtues: Ethics for an Age of Commerce (2006), for which he deserves some sort of reading medal. But he has not had the chance to read the whole second volume still forthcoming (soon, soon), Bourgeois Dignity: Why Economics Can’t Explain the Modern World, and I guess he has not wandered in my website, deirdremccloskey.org, which adumbrates the whole, crazy project of six books (four to go). He therefore is critical of a project that is not mine, that of “most economists” — when my actual project is more or less identical to his: namely, bringing into alignment, with a well-formed model of creativity, and some actual history of it to boot, the values and the creative potential of innovation.

It’s conventional, for example, for non-economists (which Feinstein is not) to complain that economists think the present economy is “hunky-dory.” But that’s not Deirdre McCloskey’s opinion. True, I think that creativity has been unleashed by the new “pattern of life” established first in Holland in the seventeenth century and then extended with spectacular results to England, Scotland, and British North America in the eighteenth century. But in the essay I only claimed, with John Mueller in Capitalism, Socialism, and Ralph’s Pretty Good Grocery (1999), that it’s “pretty good” — though I reckon that a rise in human creative scope from the year 1800 to the present by a factor of anywhere from 20 to 100 may even be a little hunky, if not dory.

And it’s conventional for non-economists (though I repeat: he’s an economist) to complain that economists don’t acknowledge how productive it is to “discuss your creative interests with those around you” and to work so that “society encourages everyone to engage in their own personal process of creative development.” The non-economists who complain so are I suppose unacquainted with Austrian economics, which acknowledges exactly such processes of discovery. Feinstein would find the Austrians interesting, I think, and relevant to his own work. My book is a Samuelsonian economist’s discovery of the Austrians, from Joseph Schumpeter through Friedrich Hayek to Israel Kirzner. The next book (and I’m quite sure that Feinstein hasn’t read that one) will show a “Bourgeois Revaluation” among the Dutch around 1600 and among the English and Americans around 1700 that depended on discussing creative interests with those around them, in the new coffee houses and newspapers and parliaments. And the fourth book (stop me before I write again) will make a theory of economic language, something that almost all economists ignore. Feinstein and I, though, don’t.

So Feinstein’s project and mine are the same. Our project is to shift attention away from the allocative answers that economists love, and that have corrupted business schools under the heading of “agency theory,” and towards the creative questions that have in fact dominated the economic history of the world since 1800, with beginnings around the North Sea after 1600. He calls it “the process of creative development.” I call it the Bourgeois Revaluation arising from a new Bourgeois Dignity and liberty, expressed as a change in the Bourgeois Virtues, and resulting in the Great Fact of wider scope for creativity in the Bourgeois Era. Same thing.

Also from this issue

Lead Essay

  • Bourgeois Dignity: A Revolution in Rhetoric by Deirdre McCloskey

    In this month’s lead essay, Deirdre McCloskey summarizes the argument of her forthcoming book, Bourgeois Dignity: Why Economics Can’t Explain the Modern World. She argues that while the modern world rode an economic tide, the tide did not have economic causes. Changes in thinking and, yes, in rhetoric did the real work. Neither thrift, nor greed, nor the Protestant ethos are at the heart of this transformation, which brought material prosperity to whole classes that had never before known it. A variety of possible causes must be dismissed, she argues, from foreign trade, to legal institutions, to coal. The dignity and liberty of the bourgeoisie are the keys to economic transformation.

Essays

  • Why Economics MUST Explain the Modern World by Gregory Clark

    Gregory Clark argues that cultural or intellectual developments, like the rise of the bourgeois virtues, ultimately can’t explain the modern world. Not only were such virtues around long before the Industrial Revolution, but they have come and gone throughout many different societies over thousands of years. Why, then, did the Industrial Revolution only happen so recently, and only once? Worse, if we accept that cultural changes brought modern prosperity, we face the prospect that future changes in intellectual fashion may rob us of prosperity as easily as it was bestowed. This he finds both unfortunate and, thankfully, unlikely.

  • Don’t Dismiss the Materialist Explanation by Matt Ridley

    Matt Ridley makes two connected points: First, surges in creativity and innovation are far from unique. They can be observed throughout history, and they are usually connected to increases in trade and specialization. In this sense, Britain during the eighteenth century was not exceptional.

    Second, however, Britain was exceptional in another respect — it had large reserves of coal, and it began putting them to use. Cheap energy helped ensure that the boom in innovation didn’t die out. Entrepreneurs won out against plunderers in part because they had this resource at their disposal, and because they could make the case for the benefits of innovation so easily. It was only after the switch to a coal-driven economy that wages finally began to rise for the typical British worker. They continue to do so today thanks to coal and to other sources of cheap energy that have since been discovered and exploited.

  • Unleashing Creative Development by Jonathan Feinstein

    Jonathan Feinstein suggests that the revolution in human creativity is still underway, and that we have not yet fully recognized what it means to be creative. The science of creativity, he argues, is key here, as the creative process is very different from what most people imagine it to be.

The Conversation