Why bourgeois values matter

The bourgeois virtues of economic historian Deirdre McCloskey.

A defence of capitalism by economic historian Deirdre McCloskey

Saturday afternoon, I went searching for the Occupy Canada protesters in Toronto, where I live, and found them in at a little park near the Anglican Cathedral.

There didn't seem to be many of them, mostly just students and public service workers (CUPE had a bus there).

With the escalation in rhetoric, from Occupy Wall Street to occupy an entire country (Canada), I confess I was expecting more.

A red banner in the park proclaimed "No to Capitalism and Yes to Socialism."

It was at that point I wandered the few blocks over to St. Lawrence Market, which was still bustling, and noticed a few protesters eating back bacon sandwiches. Why not? It was an outing.

A few more blocks away, the Eaton Centre was jammed with customers buying fall weather clothing and whatever else caught their eyes.

It was then I determined, in my acute manner that, occupied or not, this was not a revolutionary situation. No, sirree.

That insight was later reinforced when I was informed by CBC Radio that "hundreds" of protestors had filled the streets of Montreal (as well as other Canadian cities). Hundreds.

Bourgeois virtue

Still, sparse as they were, the protestors have an argument. Income inequality and unemployment is rife in both countries and no one is immune from economic uncertainty.

Economic historian Deirdre McCloskey. (Courtesy Deirdre McCloskey website)

So, with the scent of class warfare (as the Republicans like to call it) in the air, let me introduce you to Deirdre McCloskey, who finds herself in the awkward position of defending capitalism when its normally robust champions are taking cover.

(Even Conrad Black was wary in Saturday's National Post and said the protestors have a point. Yes, Conrad Black.) 

McCloskey, who you can hear Thursday (Oct. 20) on CBC Radio's Ideas, is an economic historian from the University of Illinois in Chicago.

She's also the author of Bourgeois Dignity: Why Economics Can't Explain the Modern World, the second in a massive four-volume series.

Volume one is called The Bourgeois Virtues.

The wealth makers

I would wager that a good number of the occupying protestors on the streets today would not see much virtue in the bourgeoisie, which, in Marxist terms, describes those who own the "means of production."

Over the years, the term bourgeois has grown into an almost universal put-down.

Though McCloskey is using it as the French originally did, to refer to "free citizens," those who are part of the merchant class, artisans and professionals, the educated, the well-paid wage holders — pretty much everybody who sees themselves as what we would today call the middle class.

What's more, she sees it as her mission to restore some lustre to that particular grouping.

McCloskey thinks economists have not paid enough attention to the remarkable occurrence in the Netherlands, Northern Europe and Britain at around 1800, a period that still largely defines how we live today.

Back then (the date is only approximate) there was a sea change in how people looked at those who innovated and created wealth.

The 'bourgeois deal'

In her books, McCloskey argues that it wasn't property rights, or rule of law, or imperialism, or a dozen other factors that led to all this wealth creation and feathered the nest of the bourgeoisie.

Occupy Toronto protestors gather at Dundas Square on Monday, Oct. 17, 2011.

"What changed was sociology and politics, the dignity and the liberty for the middle class — the bourgeoisie," she says.

"The world signed on to what I call  'The Bourgeois Deal' — you let me innovate, and don't steal from me after it succeeds, and in the long run I'll make you rich. And that's what happened."

With this bourgeois deal, the industrialists and the innovators were bathed in a warm glow of affirmation and prestige. The change was not so much in the material foundations of society as in its sense of itself, its imagination.

That wasn't generally the case in past civilizations, like China or Medieval Europe, where wealthy people might be feared or influential but were seldom emulated. 

With this unleashing of creativity in the money-making sectors — and its validation by society — incomes zoomed.

It's all in the attitude, says McCloskey, and in the words that buoy individuals and allow the money making part of their characters to flourish.

Creative destruction

All the same, McCloskey has some sympathy for the occupying protestors, as well as a warning. In an email to me, she gave them this advice: "Aim at the rich people who buy protection from Congress or Parliament, yes."

But, "don't attack the system of free exchange and innovation that gave us our great wealth. Disrupting the congressional-banking complex, sure.

"Killing the golden goose, no."

McCloskey calls herself libertarian, a term that can have a nutty right-wing flavour these days. But she is certainly no apologist for political or corporate corruption, which she sees as a real problem that has dogged capitalism right from the beginning.

As well, she argues, corporations get lazy when they reach the top and want to establish themselves as monopolies, which she adamantly opposes.

Fight to stay on top by innovating. That's her big message.

Now, McCloskey takes the long view of our economic system and believes in the capitalist credo of drastic change or "creative destruction," something that the protestors themselves may be terrified of.

In fact, she has gone through her own personal version of creative destruction by changing sex. In 1995, this 52-year-old professor, with two kids and a 30-year marriage, became a woman. Donald became Deirdre.

It took many surgeries and hormone treatments to accomplish her goal. (And she wrote a well-reviewed book about it, Crossing: A Memoir.)

But the process helped her widen her perspective as an economist, she says. It also allowed her to be become more open-minded, more motherly and a more rounded individual, while still retaining a furious work ethic.

Qualities you might wish in our economic system.