Dear Reader: This is a crude draft as of August 15, 2018. The three asterisks or the bold

Show this from growth figures, scale of foreign trade, urbanization up to 1700 What mattered most were the very words of such people. So at least has been assumed in the numerous attempts, often successful, to control behavior through controlling voice, not always backed by violence, such as Cato the Censor in Rome or theatre censorship in England or the U.S. Post Office Inspectorate or trips to the Gulag for people like Solzhenitsyn who could not keep their mouths shut.

Yet many people still believe stoutly, without much evidence, that ideas were not important. One needs to persuade them sweetly of their error. Without Adam Smith, for example, the rhetoric of innovation would have developed in different ways, if at all. He himself wrote eloquently in 1776 against the notion that only material interests matter: after all, the entire point of The Wealth of Nations was to assault what he called the “commercial system,” that is, mercantilism, another system of ideas. Slowly his own eloquence came to matter. He would not have wasted his breath had he thought ideas were mere reflexes of the interests, as the numerous vulgar Marxists of the left and the right claim to believe. Thus the great American economist, George Stigler asserted in The Economist as Preacher (1982): “We live in a world that is full of mistaken policies, but they are not mistaken for their followers. . . . Individuals always know their true self-interest [except perhaps Stigler’s students, who needed to be instructed?]. . . . Each sector of the public will therefore demand services from intellectuals favorable to the interests of that sector.”⁵⁰⁹ That part of his argument is identical to Antonio Gramsci’s on the role of the intellectual: “every social group. . . creates together with itself, organically, one or more strata of intellectuals.”⁵¹⁰ But Gramsci the Italian Marxist (1891-1937) was much less of a historical materialist than was Stigler the Chicago-School economist (1911-1991). With Lenin, Gramsci believed in a role for rhetoric and the Party, and was opposed to an “economism” such as Stigler advocated in his old age, the cynical half truth that the Interests will always out.

Smith knew the Interests well, and spent the last third of his book of 1776 railing against them. But he knew as well the other half of the truth, too, the force of raillery, and knew that intellectuals can have a historical role independent of the interests of a sector or social group. "To found a great empire for the sole purpose of raising up a people of customers, may at first sight appear,” he thundered, “a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers, but extremely fit for a nation whose government is influenced by shopkeepers."⁵¹¹ A government influenced by shopkeepers was the Deventer and the Merchant Adventurer’s case. Repeatedly the shopkeepers and corporations since then have attempted to re-impose mercantilism, using their influence on the state to protect American sugar growers (and thus killing innovation in the use of sugar for auto fuel) or to extend the copyright on Mickey Mouse (and thus killing innovation in the use of images). Worse, sometimes much worse, has arisen from the military-industrial complex that Eisenhower warned us against. We must, as Smith said and did, marshal our rhetoric against ”the clamorous importunity of partial interest.”⁵¹² Indeed. Down with corporate welfare! Overthrow the military-industrial complex! Prevent monopolies from using “regulation” as a tool to block entry! Don’t be fooled! Aux presses, citoyens.

But in modern times the bigger danger than corruption by the bourgeoisie itself, real though that danger is, has been the re-imposition of neo-aristocratic or neo-Christian notions of the proper place of business, expressed as nationalism or socialism. Such notions have in the twentieth century caused great slaughters of people and great violations of liberty: Kaiser Wilhelm, Mussolini, Lenin, Stalin, Hitler, Franco, Tojo, Mao, Castro, Ho Chi Minh, Pol Pot, King Saud, Saddam Hussein, Kim Jong-il. A dreary record. Corporate welfare by contrast has merely enriched a few well placed people with seven houses.

Fascism and communism arose through rhetoric armed as much as did liberty, since rhetoric matters in the attacks on economic or political liberty as much as in their defense. The aristocracy or the country club, for example, favors a nationalist rhetoric nurturing military power, and a version of neo-aristocracy, in the name of King and Country. For a moderate showing of such tendencies in the United States see any Republican Party national convention. The progressive Christians or the clerisy favors a socialist rhetoric nurturing the leading members of the Party and selected trade unions, in the name of the wretched of the earth. For a moderate showing of such tendencies in the United States see any Democratic Party convention. The defeat in the twentieth century of the extremes of each was a close call, and the rhetoric of the country club and the clerisy has mattered. In the 1930s the country club sidled up to fascism, the clerisy to communism. The European Civil War 1914-1989 showed how high-minded theories of nationalism or socialism or, God help us, national socialism could kill off liberty and prosperity, and tens of millions of people to the bargain. If you doubt that ideas matter, consider the importance of individuals in that pitiful history, when conditions were ripe. The “ideational” literature in recent political science calls the vital few “carriers,” “capable of persuading others to reconsider the ways they think and act.”⁵¹³ No Lenin, with his pen, no October/November 1917. No Hitler, with his voice, no January 1933.

The rhetorical and ethical change around 1700 caused modern economic growth, which at length freed us from ageless poverty. Modern economic growth did not corrupt our souls, contrary to the anti-bourgeois rhetoric of the clerisy since 1848, and contrary to an older line of aristocratic and religious criticism of bourgeois life. The rhetorical and ethical change at the national level was necessary for the first Industrial Revolution. It was even perhaps jointly sufficient—with property rights standing as a supersaturated solution into which the crystal of the dignity of ordinary life was dropped.⁵¹⁴ British people in the eighteenth century came to accept the creative destruction of old ways of doing things, becoming in a famous phrase of Blackstone’s “a polite and commercial people.”⁵¹⁵ The economy paid them back with interest. The Marxists call the acceptance of innovation “false consciousness,” and it may be. But unless the masses in a democracy accept innovation, falsely or not, they can be led by populists to rise up and kill the goose, as in Hugo Chavez’ Venezuela.

European people in the nineteenth century came to think of themselves as endowed by their businesslike Creator with inalienable rights, especially to liberty and property. More innovative rhetoric. The rhetoric paid them back at length, paradoxically, with freed slaves and freed women. People in the late twentieth century from the Philippines to Ukraine came to expect to have a say in their governments, as in their markets. The polity, too, paid them back with democratic liberalism, a free press, the Iowa caucuses, the South African constitution, and all our joy.

We need now to guard the resulting precipitate against cynicism and utopianism. One might well worry about the “cultural contradictions of capitalism” articulated with horror or glee by Daniel Bell and Polanyi and Schumpeter and Weber and Lenin and Marx. Innovation can indeed produce its own gravediggers.⁵¹⁶ “Is it possible,” asked the liberal historian Macaulay in 1829, “that in the bosom of civilization itself may be engendered the malady which shall destroy it? Is it possible that, in two or three hundred years, a few lean and half-naked fishermen may divide with owls and foxes the ruins of the greatest European cities—may wash their nets amidst the relics of her gigantic docks?”⁵¹⁷ As Macaulay noted, under democracy such an outcome is implied by the strictly short-run, prudence-only, interest-rules, people-know-which-side-of-their-bread-is-buttered-without-instruction theory of the act-utilitarians among us.

But we do not have to admit the utilitarian, prudence-only theory. It hasn’t worked very well as a descriptive theory outside certain narrowly economic contexts—it has failed, for example, in realist studies of foreign policy. It encourages an unethical version of ethics. On the contrary, ideologies matter. People are in fact open to instruction that bourgeois life can be virtuous and that bankers should be wise. And anyway, to repeat, no writer urging better economic or political policy can propose without self-contradiction the cynical, amoral theory. If economism is true, put down your pen. If you’re so smart, why are you urging others to ignore their selfish interests? Let the short-run self-interest of the poor and the powerful come to wreck innovation, in the style of twentieth-century Argentina. Let us welcome a life of lean and half-naked fishermen, and the ruin of cities. Perhaps it is mistaken to assert that rhetoric in favor of innovation, a new neural pathway in the brain, was sufficient to initiate prosperity and liberty, and that it is still necessary to retain them. We shall see. But at least such assertion are not a performative self-contradictions, such as persuaders trying to persuade you that persuasion is a nullity.

The modern world required a Bourgeois Revaluation. Indeed, it still does. Russia will not fully enter the modern world until it abandons its hostility to any tall poppy, any successful businessperson. China and India are trying to. But from the clerisy left and right comes the irritated reply: “You mean you want me to accord dignity to the wretched promoters and profiteers? Are you nuts? I’m barely willing to give them the mere liberty to forward their schemes. They get their reward here below, in cash. They hardly need to be admired! I’m sticking with holy equality [thus the left] or glorious distinction [thus the right]. My admired people are saints and soldiers, not innovators and managers. Lenin not Rockefeller. Dorothy Day not Herbert Hoover. Leni Riefenstahl not Walt Disney. Patton not Eisenhower. Tom Joad not George Babbitt.” I wish they would stop to think.

The Bourgeois Revaluation was an ethical event, of course. Northwestern Europe came to honor the outcome of markets, in both senses of “honor.” It accorded dignity to them. And it gave them the liberty to happen, as in “honoring” a contract. But laissez faire was ethical in another sense, too.⁵¹⁸ It was a decision to treat markets as ethically privileged, to stop according privilege to hierarchy (“Stand aside, knave”) and to start according privilege to exchange (“The price is the price”). Hierarchy of course did not disappear. Men, elders, guildsmen, millionaires, officials, whites, and citizens of the town still lorded it over women, minors, apprentices, paupers, subjects, blacks, and foreigners. The Chicago School’s and the Marxists’ cynical version of the Golden Rule still held sway: those who have the gold, rule. But hierarchy less commonly after the Bourgeois Revaluation trumped the outcome of markets, and especially so in the crucial matter of innovation. Even a person with bags of gold could not so often delay an innovation, unless indeed he could corrupt the existing institutions of hierarchy, such as the state, and bring in a regulation. In Florence in 1430 an innovation in making cloth that disturbed the profits and therefore offended the standing of give correct name of guild from Florence book, and use a real name of the time was forbidden. An outrage. In Manchester in 1830 similar innovation that disturbed the profits of English name, preferable Clough’s father was admired, or at the least not whined about, whatever its effects on his standing. Clever, that. In other words, laissez faire, laissez passer comes with the Bourgeois Deal: if you let me innovate and make profits, in the long run I’ll make us all rich. (And he did.)

In a way that illuminates the point at issue here, economists routinely fumble the definition of one of their favorite bits of twentieth-century jargon, an “externality.” “External effects” are supposed to be grounds for state intervention to repair the misdeeds of markets. The economist will write that “in the presence of externalities, an institutional arrangement could be efficient for the individuals transacting (i.e. in their best interests), while being inefficient for society as a whole because it affects the welfare of third parties.” But wait. Every action in a society has effects on the welfare of third parties. If I bid for something on E-Bay I affect all the other people by raising its price. Not much, but a little: an effect. Something is wrong. By such a definition the state should intervene when you, buying a loaf of bread, take it out of the mouth of some poor and worthy person, or when you innovated in making cloth, taking profits out of the pocket of NNN as above in Florence. The jargon of “externalities” was on the contrary invented to speak of the contrast between effects within markets and those outside of it, such as the alleged inability of beekeepers or lighthouse keepers to get market compensation for their beneficial activities. The correct definition must therefore contain a phrase like “because it effects the welfare of third parties in ways other than supply and demand.” The claim to achieve (to use more of the beloved jargon) “efficiency” is only about events happening within unregulated markets. The economist says, “if property is secure and exchange permitted, then people will achieve by supply and demand the ‘contract curve’ in an ‘Edgeworth box,’ subject to the limits of ‘transaction costs.’” Whew.

The blizzard of such jargon has made it hard for economists to see their ethical feet. The point is that deciding what is in and what is out of the market is an ethical decision. No man is an island, entire of itself. Only Crusoe on his island, before Friday, does not cause spillovers on other humans. We humans then decide to let some spillovers pass, and others not. We decide to let innovations in making cloth go forward unimpeded, or not. We decide to let markets in babies to take place, or not. As disturbing as it is to the claim that economics is free of values, like chemistry (but consider Nobel and his dynamite; consider the trigger for the first atomic bomb; consider Dow Chemical and Agent Orange; keep considering), the Bourgeois Revaluation declared markets ethical. Its servants in forming a historical block (the economists) declared much later that good spillovers are to be called supply and demand, while bad spillovers are to be called externalities.

Such ruminations will irritate both left and right. The left wants it to be obvious that we should intervene to stop the outcome of markets and innovation when they appear to hurt some poor and worthy person. But I am claiming that an ethical decision to let some—most—innovations go forward has been necessary to the gigantic enrichment of the world’s poor. It might have turned out another way. It might have been, as Marx expected, that innovation would be immiserizing. But in the event it wasn’t. On the contrary, innovation has been vastly more effective in making us better off than regulations and unions and taxes and redistributions and planning. If you want poor people to prosper—and left and right the ethical people do—you need to buy into the Bourgeois Deal.

Marxist conflict theory, such as that of Brenner or Wallerstein, supposes that the correct way to start is class conflict. Elias Khalil observes that

Feminist theory . . . envisions the boundary between the genders, but not the boundary between classes, to be the ultimate entry point of analysis. For feminist theory. . . the family cannot have an identifiable objective function as long as the male and female have unequal power. One can envision similar theories of boundaries that draw the lines according to religion, race, or nationality. ⁵¹⁹

Indeed one can. The economists’ position as social philosopher, adopted first in the eighteenth century, claims that one can and should think of the welfare of the world as a whole, not according to class, gender, religion, race, or nationality. Political economy, later to be called economics, came into its own when the objective function became People instead or this or that interest. The distinctive mark of the politics of economics since Turgot and Smith is its claim---which may be disputed on realistic or conspiratorial or false-consciousness grounds---to take into account all of humanity. The conflict theorists do dispute the claim to represent all humans: “Don’t be naïve: the real world starts from the divisions by race, class, gender, nationality.” And in a zero-sum world of hierarchy they are surely correct. Yet the Bourgeois Era led to such gigantic enrichment that zero-sum no longer makes sense.

The hard-minded right, on the other hand, wants it to be obvious that markets and innovation are just desirable, no weepy-eyed ethics about it. Perhaps they should have noticed that “desirable” is an evaluative term, and “justice” a virtue, and ethics necessary for any human life. But in any case. . . .

&Chapter 24:

It Was a Rhetorical Change,

Not a Deep Cultural One
The Industrial Revolution and the modern world did not arise in the first instance from a quickening of the capitalist spirit or the Scientific Revolution or an original accumulation of capital or an exploitation of the periphery or imperialistic exploitation or a rise in the savings rate or a better enforcement of property rights or a higher birth-rate of the profit-making gifted or a manufacturing capitalism taking over from commercial capitalism, or from any other of the mainly materialist machinery beloved of economists and calculators left and right. The machines weren’t necessary. There were substitutes for each of them, as the economic historian Alexander Gerschenkron argued long ago.⁵²⁰

Surprisingly, what seem at first the most malleable of things—words, metaphors, narratives—were the most necessary. In the First Industrial Revolution there were no substitutes for bourgeois talk. Followership after the first revolution has been another matter. With techniques borrowed from bourgeois societies a Stalin could suppress bourgeois talk and yet make a lot of steel. In 1700, however, the absence of the new dignity for merchants and inventors in Britain would have led to the crushing of enterprise, as it had always been crushed before. Governments would have stopped invention to protect the vested interests, as they always had done. Gifted people would have opted for careers as soldiers or priests or courtiers, as always. The hobby of scientific inquiry that swept Britain in the early eighteenth century would have remained in the parlor, and never transitioned to the mill.

The talk mattered, whether or not the talk had exactly its intended effect. In the late eighteenth-century a male and female public that eagerly read Hannah More and William Cowper created middle class values from hymns and novels and books of instruction, “an expanding literate public seeking not only diversion but instruction.”⁵²¹ Similarly, the Abbé Sieyes’ essay of 1789, What is the Third Estate? had a lasting impact on French politics. In A Rhetoric of Bourgeois Revolution the historian William Sewell argues that “the literary devices that characterized Sieyes’s rhetoric of social revolution quickly became standard elements in a revolutionary rhetorical lexicon. His language, it seems fair to say, had . . . enduring and powerful effects on French political culture.”⁵²² As Tocqueville famously put it in 1856, “Our men of letters did not merely impart their revolutionary ideas to the French nation; they also shaped the national temperament and outlook on life. In the long process of molding men’s minds to their ideal pattern their task was all the easier since the French had had no training in the field of politics, and thus they had a clear field.”⁵²³ Even in the British colonies from Vermont to Georgia and the new nation made out of them—places with a good deal of local training in the field of politics—the rhetoric of the American Declaration of Independence, or the Gettysburg Address, or the Four Freedoms speech, or the I Have a Dream speech, had lasting enduring and powerful effects in molding people’s minds.⁵²⁴ The word’s the thing.

Modernity did not arise from the deep psycho-social changes that Max Weber posited in 1904-05. Weber’s evidence was of course the talk of people. Yet he believed he was getting deeper, into the core of their psycho-social being. It was not a Protestant ethic or a change in acquisitive desires or a rise of national feeling or an “industrious revolution” or a new experimental attitude or any other change in people’s deep behavior as individuals that initiated the new life of capitalism. These were not trivial, and were surely the flourishing branches of a new bourgeois civilization. They were branches, however, not the root. People have always been proud and hard working and acquisitive and curious, when circumstances warranted it. From the beginning , for example, greed has been a sin, and prudent self-interest a virtue. There’s nothing Early Modern about them. As for the pride of nationalism, Italian cities in the thirteenth century, or for that matter Italian parishes anywhere until yesterday, evinced a nationalism—the Italians still call the local version campanilismo, from campanile, the church bell tower from which the neighborhood takes its daily rhythms—that would do proud a patriotic Frenchman of 1914. And as for the Scientific Revolution, it paid off late. Without a new dignity for the bourgeois engineers and entrepreneurs its modest payoff in the eighteenth century would have been disdained, and the later payoffs postponed forever.

Yet Weber was correct that cultures and societies and economies require an animating spirit, a Geist, an earnest rhetoric of the transcendent, and that such rhetoric matters to economic performance.⁵²⁵ (Weber’s word Geist, by the way, is less incense-smelling in German than its English translation of “spirit.” Geisteswissenschaften, for example, literally in English a very spooky sounding “spirit sciences,” is the normal German word for what American academics call the “humanities,” the British “arts.”) The Geist of innovation, though, is not deep. It is superficial, located in the way people talk. Such a rhetoric can be changed. For example the conservatives in the United States during the 1980s and 1990s attacked the maternal metaphor of the New Deal and the Great Society, replacing it with a paternal metaphor of discipline.⁵²⁶ In China the talk (and admittedly also the police action) of the Communist Party down to 1978 stopped all good economic innovation in favor of back-yard blast furnaces and gigantic collective farms. Afterwards the regime gradually allowed innovation, and now China buzzes with talk of this or that opportunity to turn a yuan. Sometimes, as around the North Sea 1517 to 1719, the rhetoric can change even after it has been frozen for millennia in aristocratic and then also in Christian frames of anti-bourgeois talk. Rhetoric-as-cause lacks Romantic profundity. But for all that it is more encouraging, less racist, less nationalistic, less deterministic.

Consider twentieth century history in Britain and the United States. Look at how quickly under McKinley, then Teddy Roosevelt, and then Woodrow Wilson a previously isolationist United States came to carry a big stick in the world, to the disgust of libertarian critics like H. L. Mencken. Look at how quickly the rhetoric of working-class politics changed in Britain between the elections of 1918 and 1922, crushing the great Liberal Party. Look at how quickly the rhetoric of free speech changed in the United States after 1919, through the dissenting opinions of Holmes and Brandeis.⁵²⁷ Look at how legal prohibitions in Britain directed at advertisements for jobs or housing saying “Europeans only,” which had been commonplace in the 1960s, changed the conversation. (As late as 1991 such rhetoric was still allowed in Germany: a pub in Frankfurt had a notice on the door, Kein Zutritt für Hunde und Türken: “No entry for dogs and Turks.”⁵²⁸) Look at how quickly American apartheid changed under the pressure of the Freedom Riders and the Voting Rights Act. Racist talk and racist behavior didn’t vanish in either country, Lord knows. But the racist talk could no longer claim the dignity of law and custom, and the behavior itself was on the run. Witness Barack Obama. Look, again, at how quickly employment for married women became routine. Simone de Beauvoir, Betty Friedan, and other carriers of feminism mattered.⁵²⁹ Look at how quickly under New Labour the nationalizing Clause IV of the British Labour Party fell out of favor. Tony Blair and his rhetoric of realism mattered. One can reasonably assert some material causes for parts of these, surely. But rhetoric mattered, too, and was subject to startlingly rapid change.

The historian David Landes asserted in 1999 that “if we learn anything from the history of economic development, it is that culture makes all the difference. (Here Max Weber was right on.)”⁵³⁰ That seems to be mistaken, if “culture” here means, as Landes does intend it to mean, historically deep national characteristics. We learn instead that superficial rhetoric makes all the difference, re-figured in each generation. That’s a much more cheerful conclusion, to repeat, than that the fault is in our ancient race or class or nationality, not in our present speech, that we are underlings. As the economists William Baumol, Robert Litan, and Carl Schramm put it in 2007, “There are too many examples of countries turning their economies around in a relatively short period of time, a generation or less [Korea, Singapore, Thailand, Ireland, Spain]. . . . These successes cannot be squared with the culture-is-everything view.”⁵³¹ The same could be said of countries turning their politics around in a short period of time, with little change in deep culture: defeated Germany, Franco-less Spain, Russia-freed Ukraine, enriched Taiwan. Culture is not much to the point, it would seem—unless, indeed, “culture” is understood as “the rhetoric people presently find persuasive.” In which case, yes, right on.

The argument is that, contrary to a notion of essences derived from a Romantic theory of personality—and contrary to the other side of the Romantic coin, a notion of pre-known preferences derived from a utilitarian theory of decision-without-rhetorical-reflection—what we do is to some large degree determined by how we talk to others and to ourselves. As Bernard Manin put it, “The free individual is not one who already knows absolutely what he wants, but one who has incomplete preferences and is trying by means of interior deliberation and dialogue with others to determine precisely what he does want.”⁵³² Manin points out that avant les lettres, in 1755, Rousseau mixed the Romantic and the utilitarian hostilities to such a democratic rhetoric into a nasty and influential concoction, which precisely denied deliberation and rhetoric.⁵³³ Just vote, or discern without voting the General Will.

Rhetoric is of course a part of culture. But it is the superficial part. “Superficial” is not here another word for “stupid” or “unimportant.” Depth-analyses that turn on a Human Nature inherited from imagined African savannahs or an English Character inherited from imagined Anglo-Saxon liberties don’t really explain why men rape or why England has more cargo. The rhetoric of men’s sexual dominance over women (“But she wants it”) or the rhetoric of a business civilization (“That government is best that governs least”) do explain such things, and both rhetoric cans and did change, quickly. Not “easily.” Quickly.

Attributing to deeper culture or personality a behavior that in fact arises from present rhetoric or circumstances is called by social psychologists the “fundamental attribution error.”⁵³⁴ Seemingly profound and permanent differences in cultural dispositions to which we attribute so much can disappear in a generation or two. The grandchildren of Hmong immigrants to the United States differ in many of their values-in-action only a little from the grandchildren of British immigrants. If you are not persuaded, add a “great” to “grandchildren,” or another “great.” What persists and yet develops and in the end influences, by exposition at a mother’s knee or through stories told in literature high and low, or the rumors of the newspapers and the chatter on the web—a climate of opinion and party politics new in England in the 1690s, for example—are spoken ethical valuations, that is to say, rhetoric.⁵³⁵ We value others, ourselves, the transcendent in our talk.

Consider for example the high rhetorical valuation of prudence and hope and courage in American civilization. It keeps faith with a spoken identity of unrootedness, what the Dutch economist Arjo Klamer has called the American “caravan” society as against the “citadel” society of Europe.⁵³⁶ It speaks us in the American frontier myth or the Hollywood road movie, the American folk religion that “you can be anything you want to be.” It wipes out in a couple of generations a Northern European ethic of temperance and egalitarian justice (consult Garrison Keillor) or an East Asian ethic of prudence and family faithfulness (consult Amy Tan).⁵³⁷

Many people said in the 1950s and 1960s and 1970s and the 1980s that India would never develop economically, that Hindu culture was hopelessly otherworldly and would always be hostile to innovation. True, some wise heads, such as the professor of English literature Nirad Chaudhuri, demurred. In 1959 Chaudhuri pointed out that Christian England was actually less profit-oriented in its prayer for daily bread than was the daily Hindu prayer to Durga, the Mother Goddess: “give me longevity, fame, good fortune, O Goddess, give me sons, wealth, and all things desirable.”⁵³⁸ But most social scientists saw only vicious circles of poverty. Over the forty years after Independence such a rhetoric of a Gandhi-cum-London-School-of-Economics socialism held the “Hindu rate of growth” to 3.2 percent per year, implying a miserable 1 percent a year per capita as the population grew. Nehru wrote with satisfaction in 1962 that “the West also brings an antidote to the evils of cut-throat civilization—the principle of socialism. . . . This is not so unlike the old Brahmin idea of service.”⁵³⁹

But at last the anti-market rhetoric from the European 1930s and “the old Brahmin idea of service” faded. A capitalist, innovating rhetoric took root in India, partially upending the “License Raj.”⁵⁴⁰ And so the place commenced, especially after the economist Manmohan Singh began in 1991 to direct economic policy, to increase the production of goods and services at rates shockingly higher than in the days of five-year plans and corrupt regulation and socialist governments led by students of Harold Laski. By 2008 Indian national income was growing at fully 7 percent a year per head (7.6 in 2005 and 2006). Birth rates were falling, as they do when people get better off.

At 7.0 percent per year compounded the very worst of Indian poverty will disappear in a generation of twenty years, because income per head will have increased then by a factor of 3.9. The leading student of such matters, Angus Maddison, comes to about the same conclusion in his projections for the year 2030.⁵⁴¹ Income will be well over the 2003 level of income per head at purchasing power parity of Mexico—not heaven on earth, but a lot better than New Delhi now, or a lot better than all of India at $2,160 on the same basis in 2003.⁵⁴² Much of the culture didn’t change in the seventeen years after 1991, and probably won’t change much in the twenty years after 2008. People still give offerings to Lakshmi and the son of Gauri, as they did in 1947 and 1991. They still play cricket. In 2028, one supposes, the Indians will still engage in these endearing cultural practices. And in 2048, after merely two generations at such bourgeois rates of growth, average income will have risen by a factor of fully 16 over what it was in 2008, and the level will be well over what is was in the United States in 2003. Yet even by 2048 in much of their talk and action the Indians will probably not have the slightest temptation to become like Chicagoans or Parisians, no more than southern Italians once very poor have adopted (as they became by international standards rich) an American style of driving or a British taste in food. Yet in their rhetoric about the economy the Italians did, and the Indians will, enter the modern world, and the modern word, of a bourgeois civilization. And they will be the better for it, materially and spiritually.

What changed in Europe, and then the world, was the rhetoric of trade and production and innovation—that is, the way influential people such as Defoe, Voltaire, Montesquieu, Hume, Turgot, Franklin, Smith, Paine, Wilkes, Condorcet, Pitt, Sieyes, Napoleon, Godwin, Humboldt, Wollstonecraft, Bastiat, Martineau, Mill, Manzoni, Macaulay, Peel, and Emerson, and then almost everyone, with the exception of an initially tiny group of anti-bourgeois clerisy gathering strength after 1848 such as Carlyle, List, Carey, Flaubert, Ruskin, Marx, and Thoreau, talked about earning a living. The bourgeois talk was challenged mainly by appeal to traditional values, aristocratic or religious, developing into nationalism, socialism, and environmentalism. But increasingly, as in Jane Austen, a rhetoric by no means enthusiastic for trade did accept—or at any rate acknowledged with genial amusement—the values of the polite and commercial people.⁵⁴³ The talk mattered because it affected how economic activity was valued and how governments behaved towards it.

Max Weber in fact had also such a change in mind. His instinct to take religious doctrine seriously in explaining the change deserves respect, though not exactly in the form of his triumphalism about reformed Protestantism. Only fragments remains of his original notion that Calvinists were especially enterprising. In 1995 Jacques Delacroix summarized a few of the more striking counterexamples: “Amsterdam’s wealth was centered on Catholic families; the economically advanced German Rhineland is more Catholic than Protestant; all-Catholic Belgium was the second country to industrialize.”⁵⁴⁴ One could mention, too, the earlier evidence of capitalist vigor in Catholic Venice, Florence, Barcelona, Lisbon—unless one were pre-committed to the mistaken notion that no “capitalism” could possibly exist before 1600. And Sweden, Prussia, and Scotland showed no signs of economic dynamism in the first couple of centuries of the priesthood of all believers.⁵⁴⁵

The change in talk about economic life—which by the way was born at the theoretical level in Catholic Spain before Protestant England, and in Italy among theologians before Spain, though both died in childhood—provided warrants for certain changes in behavior.⁵⁴⁶ The talk was essential. The trade to the East and the New World was not essential, although it got the most press. Early and late the trade overseas was small relative to the trade among the Europeans themselves, and especially relative to trade inside each European country. Trade in, say, France is mainly a matter of deals with other French people close by, not the deals with Native Americans at Québec for furs or with south Asians at Pondichéry for spices that constituted a tiny portion of the nation’s consumption. The character of the European bourgeoisie itself did not change. The merchants and manufacturers attended to business as they always had, early and late. They “had somewhere to get to and sailed calmly on.” They were literate and used balance sheets and thought habitually in terms of profit and loss many centuries before such rhetorical habits became honorable among the elite and then among the generality. Nationalism did change in some places—though a lively literature nowadays dates English nationalism from many centuries before the Industrial Revolution, and even French and Scottish and Irish nationalism can be dated quite early, in reaction to the God-damning English bowmen or the God-fearing Cromwellian musketeers. And on the other hand the bourgeois and enterprising Dutch have not to this day developed a nationalism comparable to England’s. Compare the levels of football hooliganism among the supporters of the two countries’ national teams.

But in economic effects all these were side shows. What did change in northwestern Europe was the spoken attitude towards the bourgeois life and the capitalist economy, in the rhetoric of the bourgeoisie themselves and in that of their traditional enemies. The enemies revived after the Reformation in the Spanish and French lands to crush enterprise—the crushing correlated with fresh religious intolerance which England, Denmark, and Prussia managed to side-step—and then revived again Europe-wide after 1848.⁵⁴⁷ Such rhetoric for and against innovation was no side show. It was the main event, and it did change greatly in the seventeenth and eighteenth centuries. In England the pro-innovation rhetoric triumphed, and then in the world, arousing in the nineteenth century a counter-rhetoric leading to the catastrophes of the twentieth century.

Without a new rhetoric accepting of markets and innovation and the bourgeoisie, the societies of northwestern Europe would have continued to bump along in a zero-sum mode, as had every society with fleeting exceptions since the caves. Few would have ventured to turn a profit by inventing a seed drill for the wheat field or an atmospheric engine for the coal mine. Why bother, if the Sultan would throw you off a cliff for your trouble, or if the Emperor’s noblemen would swoop down to seize your profits, or if every scribbler and courtier and cleric held the floor in Madrid or Versailles or Urbino by sneering at your very existence? While a Europe roused from its provincial slumbers was fashioning a myth and eventually a science of the Orient, writes J. M Coetzee in an essay about the modern novel in Arabic, “Islam, on the other hand, knew (and cared to know) little about the West”—this long after the great age of Islamic science and scholarship.⁵⁴⁸ When in 1792-93 George III sent 600 cases of telescopes, plate glass, globes, and so forth to the Emperor of China, the Emperor was unimpressed. His servant replied, “there is nothing we lack. . . . We have never set much store on strange or ingenious objects.”⁵⁴⁹ The bourgeois civilization of Europe, on the contrary, became obsessed after 1700 with strange and ingenious objects.

But before the great change around 1700 Europe had little by way of pro-innovation ideology, and a great deal against anything so bourgeois. Castiglione’s Il Libro del Cortegiano, The Book of the Courtier, was written in 1508-1516 about an imagined conversation at the court of Guidobaldo and Francesco Maria, Dukes of Urbino, the cream of Renaissance princes. In 1528 at Venice a first edition of 1031 copies in Italian was published, and in subsequent decades it was translated into every major European language, in twenty different cities, to become one of the most popular books of the age.

It praises the very best ladies and gentlemen, among whom it certainly does not count the bourgeoisie. Ladies who use too many cosmetics are “like wily merchants who display their cloths in a dark place.” A true gentleman is motivated by glory to hazardous deeds of war, “and whoever is moved by gain or other motives. . . deserves not to be called a gentleman [gentilomo], but a most base merchant” [vilissimo mercante]. One gentleman in the imagined conversation is portrayed as deflecting praise. His praiser, he protests modestly, in offering superficially plausible praise for such a flawed person as the gentleman in question, is like “some merchants . . . who put a false coin among many good ones.”⁵⁵⁰

But in truth the bourgeoisie figures hardly at all in the book, although the splendor of the Italian Renaissance rested on its activity. Without the coming after 1700 of a bourgeois civilization—very different from the civilization recommended by Castiglione’s gentlefolk living courtly lives off taxes and rents from a commercial society they disdained—the profit from commercial invention would have continued even in northern Italy to be seen as ignoble, and innovation inglorious. Buying low and selling high would have been continued to be seen as base. Institutionalized theft and honorably restrained innovation in warfare would have continued to be seen as noble and aristocratic. Alms and tithes would have continued to be seen as holy.

Not that the actual aristocrats hesitated to engage in trade when opportunities arose in a market for grain or even for plebeian cloth, or indeed when more violent opportunities for profit arose. When defeated in battle, Norbert Elias observes in making the point, “usually only the poor and lowly, for whom no considerable ransom could be expected, were mutilated.”⁵⁵¹ Defeated fellow knights were sent home after the ransom had been collected, with ears, noses, and fingernails intact. Like most activities in the Middle Ages, warfare was monetized, trading a Richard the Lionhearted imprisoned in a castle outside Vienna for gold, as every watcher of the various movies of “Robin Hood” will know.

Likewise the actual priests kept an eye open for profit, as poetry and folk tale bitterly attest. The Cistercian monks were for centuries the cleverest merchant farmers in Europe, inventing financial instruments and labor-saving machines, and had no trouble with accumulating great wealth for the glory of God and the abbot’s table. The most insistent complaint against what the historical sociologist Rodney Stark calls the Church of Power was its single-minded pursuit of wealthy display, “to be well dressed and well shod, in order to ride on horseback and to drink and eat well,” as one of the “perfects” of the heretical Albigensians, late Gnostics, put it in the early thirteenth century.⁵⁵² **add Chaucer example, or the play. It was not desire for gain that changed. The Middle Ages are not to be viewed as a contentedly uncommercial Merrie Englande, even if starring Errol Flynn. This we know from a century of historical scholarship.

A wise economist, who might not entirely agree with my celebration of bourgeois virtues, said in 1991 that from a study of “surface phenomena: discourse, arguments, rhetoric, historically and analytically considered” emerges a finding that “discourse is shaped, not so much by fundamental personality traits [pace Weber and Landes], but simply by the imperatives of argument, almost regardless of the desires, character, or convictions of the participants.”⁵⁵³ Modern innovation is not about the rise of greed or of self-interest properly understood or of some other fundamental personality trait or deep cultural characteristic. What did change were the articulated ideas about the economy—talk about the sources of wealth, ideas and about positive sum as against zero-sum economic games, about progress and invention, and above all about what sort of calling is admirable. A professor of English put the point well in 1987: “Capitalist ideology entails, most fundamentally, the attribution of value to capitalist activity: minimally, as valuable to ends greater than itself as significant of [that is, signifying] virtue; perhaps as valuable in its own right; finally, even as value-creating.” He believes the change 1600-1740 (the period to which he attributes the origin of the English novel) witnessed the rise of such a valorized innovation. His last phrase, “value-creating” means the encouragement of values, virtues—not merely (though not excluding) exchange value.⁵⁵⁴

The big change happened in what Karl Popper called World Three, above material traits (World One) and psychological traits (World Two), up at the level of recorded, spoken, bruited-about ideas concerning the material and psychological and cultural traits. And so fresh versions of worlds One and Two were born. The danger is that they can be killed off, too, by utopian or reactionary rhetoric of the left or the right, and quickly, especially when backed by guns. The true believers wielding the guns are persuadable to some very nasty enthusiasms, such as the Shining Path in Peru, lead by a professor of philsophy, or the Khmir Rouge in Cambodia, intent on reviving the medieval glories of the Khmir Empire. The liberal ideas about the economy were killed off in 1914 and 1917 and 1933 locally. They can be again, globally. Let’s not.

Another wise economist, who also might not have found my views altogether congenial, said in 1936 that “the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. . . . I am sure the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.”⁵⁵⁵ So here.