How Did the World Go from Poor to Rich?

After tens of thousands of years of living at a subsistence level, how did the world suddenly become so rich?

By “suddenly” I mean in the last 250 years (I’m a long-term investor). However, even if you think in shorter time frames, the rise of China in the last 40 years, and of the United States, Europe, and Japan in the century before that, would have come as a big surprise to a caveman or a medieval peasant. In their new book, Leave Me Alone and I’ll Make You Rich, Deirdre McCloskey and Art Carden set forth a new and provocative answer to this question.

It was not capitalism, capital accumulation, education, pure science, technology, political freedom, or the rule of law allowing people to keep the fruits of their labors. Those were all necessary but not sufficient conditions. Other civilizations had those virtues but no Industrial Revolution resulted.

It was a sudden increase, in northwestern Europe in the 1700s, in the respect and dignity accorded the bourgeoisie. The missing ingredient was Bourgeois Dignity, as McCloskey titled one of her books.

While this line of thinking might sound like a purely academic exercise, it’s not. Getting the right answer is key to the future of global economic growth, as each country tries to find the best path forward. And the success or failure of these efforts is key to long-run future rates of return for investors today.

Laissez faire

McCloskey and Carden leave no doubt as to their basic philosophy: The book’s title is an amended translation of the familiar French phrase laissez faire, meaning, roughly, “leave me alone.” (A French government minister in the 1700s asked a businessman how he could help the business community, and laissez faire was the businessman’s answer. It caught on.) The authors’ amendment, “…and I’ll make you rich” (my emphasis), reflects their passionately held view that a thriving commercial society is good for everyone, not just for the business owner.

They also believe that a commercial republic – Hamilton’s phrase1 – is morally good and offers a milieu in which people can best realize their spiritual as well as their material potential.

About the authors

But McCloskey is no doctrinaire libertarian or conservative. Far from it. She describes herself as:

a literary, quantitative, postmodern, free-market, progressive-Episcopalian, ex-marxoid, Midwestern woman from Boston who was once a man. Not “conservative”! I’m a Christian classical liberal.2

Talk about eclectic!

She’s also a graphomane: a person who can’t stop writing. She’s written 24 books, some of them very long, and 400 articles. She needed Art Carden, an economics professor and popular contributor, to help her condense her three tomes, The Bourgeois Virtues, Bourgeois Dignity, and Bourgeois Equality (collectively called the bourgeois trilogy and weighing in at 1,700 pages), into the one reasonably short, and very good, book that is the subject of this review. While I’d only recommend the entire trilogy to the fully retired and intellectually voracious, Leave Me Alone and I’ll Make You Rich is Sunday reading, accessible to everyone. It conveys very effectively the message that McCloskey has spent the last 15 years of her life honing.