September 5, 2018

hISTORY eNDED IN 1776:

Why Liberalism's Critics Fail (Deirdre Nansen McCloskey, Summer 2018, Modern Age)

The main body of thought overlooked by anti-liberalism of all sorts, then, from Deneen's gentle communitarianism to fascism and communism, is economics after the 1860s and an economic history after the 1940s that uses economics. Deneen, like most of our deep social thinkers, has not opened a book of economics since Marx or of economic history since Polanyi. Like most intellectuals, therefore, he does not understand how a market economy works and what its actual history has been. The facts and logic adduced from the elderly or tertiary books on which he relies are regularly nonfacts, nonlogic, fake news.

Deneen believes, on the contrary, that the poor have become immiserated. But, like Marx, he is mistaken. "Inequality" is the fashionable cry, which of course Deneen echoes. But according to careful statistical studies, world inequality among individuals has declined radically in the past thirty years. And even in rich countries, the inequality we hear so much about has been grossly mismeasured. For example, measures of inequality of wealth, such as Thomas Piketty's, ignore the largest source of modern wealth: human capital. For another example, the alleged decline of the middle class in the U.S. turns out to be mostly a rise into the upper middle class, not a fall into social classes C, D, and E. For still another--the examples are legion--the quality of goods has risen sharply, making "stagnant" money earnings more valuable. Think, to take a plebian example, of modern auto tires or, of course, the amazing power of the modern smartphone, owned now even by the plebes.

During all the millennia before 1800, income per person in today's prices for the average human bumped along at about $2 or $3 a day. It was tough, at the present level of Mali and Afghanistan or of the hard-socialist regimes. Furthermore, hierarchy prevailed. Born a milkmaid, you died a milkmaid. Doubly tough. Your smart option therefore was to look inside, following Stoic and Christian and Buddhist teaching, to take up your cross, or prayer wheel, and quit whining. You'll get pie in the sky when you die, and anyway you might acquire along the way true enlightenment.

By now, however, income per person in the same prices is about $33 a day worldwide, the condition of Brazil. And the liberalism invented in the eighteenth century has partly eroded hierarchy, the condition of Australia. This amazing fact is unknown by most intellectuals damning capitalism and is unappreciated by them even when by some chance they catch wind of it.

One is led to wonder if the two events are connected, the Great Enrichment and the inclusive liberalism Deneen dislikes. They are. In a country like Japan or Sweden or the U.S. that has embraced liberalism most warmly, incomes per person as a whole-population average have risen from the old and ancient $2 or $3 a day to anything from $90 to $120, and much more if the person is highly skilled--sufficient, say, for a condo on Printer's Row in Chicago and a trip to watch birds in Antarctica. The increase is 3,000 percent in the median or average. And the poorest have gained the most. The very rich get another diamond bracelet. Splendid. But the poor get food, housing, antibiotics, and education denied to most people during all of history but the liberal era. By now, descendants by the billions of illiterate slaves and milkmaids have acquired the instruments for full human flourishing. They may not all take it. But that merely suggests that we join Deneen in preaching to them to leave off reality TV and Fritos and get to work on their Greek and Beethoven piano sonatas.

Yet the fact that liberalism resulted in billions of people having full lives does not move Deneen, or other right conservatives and left environmentalists, who fiercely attack a "consumerism" that has in truth characterized human life always. Deneen will have none of it. He wants us to go back to Brook Farm.

This (belated) realization came home while listening to a recent Liberty Law Talk podcast, How Prosperity Is Improving the World of Work: A Conversation with John Tamny, when they were discussing the prospect of technology/information creating inequality and Tyler Cowen's notion that Average is Over: all these scenarios depend on mass consumption of the product of the "above average." Yes, Jeff Bezos is absurdly wealthy, but only because the rest of us purchase so much through him.  If we were actually falling behind he'd be the only customer on Amazon. Mr. Tamny gets at this reality when talking about globalization, where Left and Right complain that America has impoverished itself by exporting jobs overseas, but, as he notes, our massive imports demonstrate how wealthy we are.




Posted by at September 5, 2018 10:45 AM

  

« THERE'S NO SUCH THING AS QUALITY: | Main | ALL ECONOMICS IS CONSERVATIVE: »