Deirdre McCloskey's Bourgeois Dignity is the second volume of a series that began with Bourgeois Virtues, published in 2006. That book, by the way, prefigured a work in four volumes, whereas this one announces itself as the second of six. So reader be warned, the series does not yet converge! Moreover, these are not short books, weighing in here at 570 pages. While the text can induce dizziness in the reader and leave her or him at times unsure where the rhetorical trail is going, the chapter titles offer a clear outline. The story begins with a celebration of modern economic growth, both its magnitude and its contribution to general welfare, and moves on to a critique of narrowly economic explanations for it, leaving the key question why the real cause, innovation, took hold where and when it did. Finally, there is an outline of the argument about the innovation-stimulating role of dignity and liberty for common people that the later volumes are to develop more fully. Since the first and third strands already figured in the earlier discussion of virtues, the principal contribution of this volume is a vast ground-clearing operation, leaving the rhetorical and verbal transformation—the “Great Revaluation” of productive common folk—as the only remaining contender for the cause of economic growth, should that liberty/dignity thesis fail to persuade fully on its merits.

A number of aspects of McCloskey's modus operandi (it's contagious) have already been noted by readers of the first volume. She is a formidable scholar and writer, strong in economics, history, and rhetoric, a learned person generally, and not stingy in sharing these qualities with the reader. Some of the allusions, dropped names, and verbal pirouettes are perhaps more to the point than others, but the reader's mind will always get a good workout. I particularly liked many of the concrete examples, imaginatively chosen. On the other hand, a favorite rhetorical device is reinforcement by reiteration, not only of what has gone before but also of what is presumably to come. I have sometimes thought of this tactic as the “cheap ham sandwich” theory of argument: a thick buildup to the thesis and a thick reference back to it, with the actual demonstration almost lost in the middle. But in this instance we are, of course, promised many more pages on the principal theme in further volumes. One aspect dear to me, and which I hope gets developed further, is the key role of cities, as hubs of information exchange, in the growth process.

The job promised in the book's subtitle takes up much of the volume. McCloskey aims to sweep narrowly economic or politico-economic explanations of economic growth, from capital accumulation (saving) to exploitation, off the stage. By and large they fail because they cannot account for the magnitude of growth, the at least sixteenfold increase in output per capita. Either X did no more than push the economy toward its capacity without increasing that potential output, or Y could only yield small increments in growth (the residual problem). When it comes to recently fashionable explanations centering on institutions and property rights, McCloskey is more circumspect, perhaps because the authors cited are often ideological allies, but still positive that they do not hold the answer either. Generally, she holds that these Z factors existed long before as well as outside NW Europe without triggering sustained growth, ergo…

Whether one is enticed or exasperated by the presentation, the argument deserves to be taken seriously. So I will focus on three points that concern me within its framework. First, I think the principal premise, that any explanation must have the power to account for the very substantial increase in human productivity, smacks too much of comparative statics. We are not dealing with an event but with a process, not effecting a leap in output but sustaining accelerated growth. McCloskey's framing is akin to the Rostovian takeoff: innovation is stimulated by granting producers sufficient liberty and dignity and the rest takes care of itself. Yet as Joel Mokyr argued in The Gifts of Athena (Princeton University Press, 2002), societies rarely keep up a high pace of innovation for very long, but tend to grow stale in largely unexplained fashion. Of course, as McCloskey points out, developed countries have converged to very similar levels of per capita income, so they must somehow have managed to keep economic growth going or to resume it, presumably being innovative enough at least to adopt others' ideas. Still, it would seem that achieving bourgeois liberty and dignity may not be enough to explain sustained long-term growth, while the innovation supposedly at the heart of the process can regress to successful imitation without major harm.

McCloskey takes on the world as a libertarian and also as a strong individualist, and the latter is also relevant to the book's argument. Her view of capitalism is a series of one-on-one conversations leading to freely chosen contracts between sentient persons which must by definition make each one better off. No unwanted interactions, no small cogs in large machines, no constraints or prohibitions save as perniciously imposed by governments, no asymmetrical information, and no significant market power. For example, the three-car garage as a manifestation of affluence has nothing to do with the consequences of sprawl, nor with self-reinforcing road congestion. Nor is it possible that the recent financial meltdown could have resulted at least in part from a financial system in which the inside players were obliged to match the (non-risk-adjusted) short-term returns of their peers or face loss of business and employment. While McCloskey does not actually say, with Margaret Thatcher and Milton Friedman, that there is no such thing as society, only autonomous individuals and their voluntary association, the sentiment is there. In her world, there is indeed little scope for active government, but the question remains whether that world bears much resemblance to ours, past or present.

Finally, though McCloskey is a fine economic historian, her evidence linking bourgeois liberty and dignity with innovation-driven growth is selective. In many times and places, marginal groups have performed admirably despite being largely deprived of both. Dissenters in England, Jews in Europe, “Levantines” in many places, East Indians in Africa and elsewhere, and overseas Chinese come to mind. Also, certain societies have established a strong economic track record with meager helpings of bourgeois liberty and/or dignity. Examples include nineteenth-century Germany, Meiji Japan, and even Communist China. Granted, the bourgeois may have fared better there during these times than before, in which case what counts is improvement rather than the absolute levels of liberty and dignity. Yet if that is the case, then why should growth persist when liberty and dignity are not growing further?

Overall, I am persuaded that McCloskey's emphasis on recognized worth and liberty leading to innovation and thence to growth will add to the conversation and not merely be used as ideological cannon fodder by apostles of small government. Perhaps a one-volume condensed edition of all six (if not more) books that leaves out the pyrotechnics will make it easier for the reader to follow and evaluate the argument. As things stand, reading this book put me in mind of hearing Paul Samuelson's presidential address to the American Economic Association in 1961, where he attributed to Tjalling Koopmans the view that fine writing might give an argument more credence than it deserved—adding that he did not think the “sin” very widespread in the economics brotherhood (I paraphrase the March 1962 AER published version). Now that the profession is recognized as a sisterhood too, here is at least one example of writing so fine that it may actually weaken or at least obscure an argument.